Everbright Capital Faces RMB 3.5 Billion Liability After RMB 60 Million MPS Investment
Everbright Capital invested RMB 60 million as a subordinated partner in a fund that acquired British sports rights firm MPS in 2016. The RMB 5.2 billion fund relied on over 80% senior capital, with Everbright guaranteeing principal and returns to senior investors. After MPS entered bankruptcy in 2018, the shortfall reached approximately RMB 3.5 billion. In 2026, a court ruled the guarantee valid, ordering payment, and clarified that such structures are not rigid redemptions.
In 2016, Everbright Capital, as a subordinated limited partner, contributed RMB 60 million and joined with several institutions to set up a fund that acquired MPS, a British sports copyright company. The fund had a total size of approximately RMB 5.2 billion, with senior capital accounting for more than 80%. Everbright Capital undertook an obligation to cover any shortfall in principal and returns for senior partners. After the acquisition, MPS's operations deteriorated continuously, and the company entered bankruptcy liquidation proceedings in 2018, making it difficult to recover the investment principal. Owing to MPS's bankruptcy, the fund faced a shortfall compensation liability of approximately RMB 3.5 billion, and senior partners asserted their claims against Everbright Capital under the agreement. In 2026, a court issued a first-instance judgment, finding that the shortfall compensation agreement signed by Everbright Capital as a subordinated limited partner was legally valid and that the payment obligation must be performed accordingly. The judgment also noted that such structured arrangements do not fall within the scope of rigid redemption, and the relevant contractual terms are binding on the signatories. This case involves a substantial amount of money, and the dispute focuses on the legal validity of the subordinated limited partner's shortfall compensation obligation in structured asset management products. The fund involved in the case has entered liquidation proceedings, and the reactions of all parties to the first-instance judgment remain to be observed.