Beijing Court to Hear Case on Founder Group Keepwell Bond Ruling

A Beijing court has agreed to hear a case concerning a Hong Kong ruling over a controversial credit protection mechanism popular among the country’s borrowers, people familiar with the matter said.

Beijing No. 1 Intermediate People’s Court last week decided to consider a petition filed on behalf of some holders of Peking University Founder Group Corp. bonds to recognize a Hong Kong court ruling regarding so-called keepwell agreements, according to one of the people. The court hasn’t yet set the date for the hearing, the person added, who requested anonymity.

The keepwell deeds are basically a gentleman’s agreement from the ...