The liquidators and creditors of Guangdong International Trust and Investment Corp (Gitic) are chasing hundreds of millions of US dollars in assets despite a recent decision by the Guangdong Higher People's Court to end the company's four-year bankruptcy proceedings. Sources have told the South China Morning Post that the continuing saga is focusing on local government guarantees of bad loans made by Gitic across Guangdong province. While the high court declared such guarantees illegal and therefore unenforceable, it also ordered local governments to pay creditors special 'Gitic compensation fees' equivalent to about 50 per cent of the nullified guarantees. One creditor who has seen a list of the local governments concerned said that most, if not all, hailed from Guangdong. However, many are either unable or unwilling to pay the compensation fees ordered by the court. One liquidation committee source said that while the total amount of these outstanding fee payments was 'still fluctuating', they could reach as much as US$360 million - or about 15 per cent of court-recognised claims against Gitic. If this money were recovered by creditors - including Citicorp, Hang Seng Bank, Sumitomo and UBS - it would more than double their recovery rate, which now stands at 12.5 per cent. Gitic was closed by the central government in October 1998 with total liabilities of US$5.6 billion. However, only about US$2.4 billion of the claims against Gitic were later deemed valid by the court. Last Friday, the liquidation committee officially informed creditors that a third repayment would be authorised later this year, bringing the total amount of money recovered to US$305.5 million. Speaking after last Friday's meeting, Guangdong high court president Lu Botao declared Gitic's bankruptcy case closed. Citing Mr Lu, the China Daily reported that 'most creditors of Gitic have expressed their satisfaction with high recovery rates and the performance of mainland courts'. Xinhua declared the announcement 'proof of the efficiency of China's legal system'. However, reports of Gitic's long-awaited demise and creditors' satisfaction appear to be greatly exaggerated. 'The court's involvement is substantially over,' said the liquidation committee source. 'However, the liquidation committee will continue because there are loads of follow-up work to do. There are still distributions to be made [to creditors] in the future. 'They claim that most of [Gitic's] major assets are already disposed. But they are still keeping the liquidation committee in operation,' said one creditor who attended Friday's meeting. 'Definitely some assets are still not fully recovered.' Among the assets not yet fully recovered is Gitic's own headquarters building, which was sold at auction in October for 1.13 billion yuan (about HK$1.06 billion). The buyer, however, failed to meet its first downpayment deadline - for 289 million yuan on January 18. Liquidation committee sources said creditors were not overly concerned with any problems related to the sale of Gitic's premier property asset as it would return only about 2 per cent of the company's court-recognised debts after auction and other fees were deducted. They were more concerned with the approximately US$360 million in unpaid local government compensation fees, as this would bring their recovery rate from the low teens to almost 30 per cent. 'Everyone is focused on this money,' said one creditor.