Hong Kong-based BFAM and some other investors outside of China were collectively owed $141.4 million in principal, $9.4 million in premiums, and $50.4 million in interest, according to the filing dated April 14.

Glory Health, listed in Hong Kong, issued offshore bonds worth $334.8 million with 14.25% annual interest in February 2022, and promised to redeem at least $9.6 million worth of notes that April.

Despite an extension to July 2022, Glory Health failed to make that redemption and those notes were deemed to be in default after creditors refused the developer a second extension, the filing said.

Glory Health has since failed to pay other interest and meet partial redemptions, it added.

Representatives for Glory Health and BFAM didn't immediately responded to Reuters request for comment.

The latest lawsuit against a Chinese property developer for non-payment of debt underscores the challenges international investors face in recovering their dues from firms reeling under mounting debts and yet-to-recover sales.

Glory Health reported 995.3 million yuan ($144.5 million) in losses for last year, and blamed "impact of repeated outbreaks of the COVID-19 and market sentiment" for its failure to repay the senior notes and other borrowings, according to its annual results filed to the Hong Kong stock exchange this month.

The company's stock dropped by 8.5% to 18.3 Hong Kong cents on Thursday. The shares are down 24% so far this year.

"The bondholders will be exhaustive in their efforts to vindicate their legal rights," said John Han, a Hong Kong-based attorney at law firm Kobre & Kim LLP, representing BFAM and other investors in the New York court case.

The lawsuit has been filed in New York as per the terms of bonds issued, said Han.

Established in April 2012, BFAM Partners is a Hong Kong-based hedge fund manager. It was founded by former Lehman Brothers trader Benjamin Fuchs. It managed around $3.5 billion late March 2022, according to the latest regulatory filing.

($1 = 6.8905 Chinese yuan renminbi)

(Reporting by Xie Yu; Editing by Sumeet Chatterjee and Kim Coghill)

By Xie Yu