Chinese exile Guo Wengui offers ‘Lady May’ yacht to creditors in bankruptcy
- The businessman owes more than US$100 million, however, and the vessel may not be worth enough to clear his debts
- The Lady May made headlines in 2020 when Trump ally Steve Bannon was arrested on board on unrelated federal charges
Exiled Chinese businessman Guo Wengui is offering to repay the more than US$100 million he owes creditors in part by offering up the yacht that drove him to bankruptcy, court papers show.
The businessman’s debt stems from a US$30 million loan he got from a fund in 2008, which according to the lender Guo failed to repay. Guo arranged for the yacht to leave US waters sometime after October 2020, putting it out of the reach of debt collectors.
That prompted a New York judge to hold the Chinese exile in contempt and levy a fine of US$134 million, leading Guo to file for bankruptcy in February just before that payment was due.
Now Guo is proposing to give the yacht to a trust that would at least partly repay his creditors, including the fund that has been suing him for years over unpaid debts. But the move is unlikely to fully satisfy to these debtholders, as the watercraft, known as the Lady May, was originally bought in 2015 for £28 million, which at current exchange rates is about US$36.5 million.
The Lady May made headlines in 2020 when Steve Bannon, a former Trump political strategist and associate of Guo, was arrested aboard the vessel on unrelated federal charges.
Guo said the boat belongs to his daughter, not himself, but Judge Barry Ostrager of New York state court in February said the exiled businessman controlled it. An entity linked to Guo originally bought the Lady May. The boat is currently docked off the southern coast of France, where it is undergoing maintenance, according to court papers.
Pacific Alliance Asia Opportunity Fund, Guo’s biggest creditor, has been suing the businessman for years over a US$30 million loan from 2008 that has ballooned to more than US$100 million with accrued interest.
Guo’s proposed plan would let Pacific Alliance either collect 10 cents on the dollar in cash for its claims or accept a proportional share of the assets contributed to the creditor trust.
Chinese exile Guo Wengui files for bankruptcy after yacht dispute
Pacific Alliance has asked Guo’s bankruptcy judge to dismiss the case, calling it a “strident gambit” to “delay, deceive, and defraud his creditors”. Guo’s insolvency filing at least temporarily halted the civil contempt ordered earlier entered by a New York judge.
Guo does not have the money to pay the US$134 million fine, he said in a sworn declaration dated March 20. Without the protection of bankruptcy court, he might be imprisoned in New York for violating the contempt order, according to the declaration. Guo filed for political asylum in the US in 2017, fearing retribution from the Chinese Communist Party over his criticism of the regime, he said.
Bankruptcy lawyers for Guo did not immediately respond to a request for comment on Monday afternoon. In his declaration, Guo said the loan from Pacific Alliance was repaid years ago and that he believes the contempt order against him is wrongful.
