CF: Yonghong Li declared bankrupt – Milan ownership vehicle company to be liquidated

The former AC Milan owner Yonghong Li has been declared bankrupt over money that he owes to creditors, a report claims.

According to official Hong Kong court documents seen by Calcio e Finanza, the Chinese businessman was declared bankrupt last July due to unpaid debts of $280m, with a liquidation hearing scheduled for next January.

In fact, the decision came last July at the end of a proceeding brought by five investment funds based in the Cayman Islands, indirectly controlled by China CITIC Financial AMC International Holding Limited, a Chinese state-owned group listed on the Hong Kong Stock Exchange.

Yonghong Li declared bankrupt

At the heart of the case is a debt of $289.17m (approximately €250m) relating to the personal guarantee Li signed in 2017 in favour of the funds for the issuance of $150m bonds, which financed the purchase of Milan from Fininvest.

The company issuing the bonds was Rossoneri Advance Co. Limited, one of the offshore structures used by Li to control the club, which has officially been requested for liquidation in recent days. Eventually, Elliott Management would take over Milan, with loans not repaid.

According to the ruling, the Hong Kong Court dismissed the challenges filed by the former Milan owner. Li had attempted to challenge the bankruptcy order, arguing that: 1) He had never been served with a ‘valid demand for payment’, and 2) that the amount of the debt had been incorrectly calculated.

The court deemed both arguments ‘baseless’, adding that the guarantee signed by Li provided for liability as a principal debtor, and therefore not subject to any written request. Even any discrepancies in interest calculations or payments already made do not affect the substance of the matter: the debt remains well above $160m, and the debtor has not demonstrated he has the means to repay it.

This led to the request for liquidation of Rossoneri Advance Co. Limited , one of the holding companies based in the British Virgin Islands through which Li controlled Milan. The holding company was placed into liquidation in recent days at the request of creditor General Fantasy Limited.

As a reminder, we had an exclusive interview with Yonghong Li a few years ago in which he shed some light on how things went with the Rossoneri, and now it seems there is some closure to the whole wild adventure.