Troubled China Shadow Bank Zhongzhi Files for Bankruptcy (3)

Chinese shadow banking giant Zhongzhi Enterprise Group Co. filed for bankruptcy, cementing the rapid downfall of a firm that oversaw more than $140 billion at its peak before succumbing to the property crisis that has wreaked havoc on the world’s second-largest economy.

Zhongzhi said it “obviously” lacked the ability to repay its debts, according to a statement Friday from Beijing’s First Intermediate People’s Court, which accepted the case. An audit found Zhongzhi’s debts were as much as 460 billion yuan ($64.3 billion), compared with assets of 200 billion yuan, according to a letter to investors in November.

The downfall marks ...