Faraday Future’s Troubled Founder Files For Bankruptcy In The U.S.

The founder and former chief executive of troubled EV startup Faraday Future, Jia Yueting, has filed for Chapter 11 bankruptcy in the United States, The Verge reports.

According to the bankruptcy filing made in Delaware court, Yueting claims he owes more than $3.6 billion to more than 100 creditors due to the collapse of LeEco, a tech conglomerate that he founded in China.

Yueting is offering to satisfy his debts through a trust backed by the value of his ownership stake in Faraday Future before he proceeds in court with the Chapter 11 filing.

Also Read: Faraday Future CEO Jia Yueting To Step Down As Part Of Restructuring Plan

This trust could pay out to creditors if the electric car startup ever goes public. This would be the best possible outcome for the businessman. At least 90 per cent of the people or businesses he owes money to must agree to the restructuring plan by November 8th. Creditors will also have to agree to release Yueting and his wife of all personal liability and drop existing claims against him.

Additionally, Yueting is asking his creditors to vote on Chapter 11 bankruptcy as a backup plan. This path to restitution would also see him leverage his stake in Faraday Future but include more involvement and oversight from the court.

Lawyers for the entrepreneur insist that it is important creditors come to a swift agreement or Faraday Future may be unable to raise money while Yueting’s Chinese debts hang in the balance. Yueting has also warned that he may need to declare Chapter 7 bankruptcy and fully liquidate all of his assets resulting in smaller payments to creditors.

  • Howfarr

    Yeutings lawyer: ‘quick get your money back before China tries to get all of its money back’

  • Reformed Alchemist

    Psst…China is broke. But don’t tell anyone or the global economy will crash….

    • Smith

      Never, they own most of the valuable real estate in the USA, actually most of the USA, and that economy is booming … apparently.

      • Reformed Alchemist

        Dig deeper. Alll bought with loans with no collateral.

  • TB

    I can’t believe this company is still around….wow. This should have died years ago.

    • Mr. EP9

      Indeed.

    • Smith

      Just like Tesla, for some strange reason people keep throwing more good money after bad. the end will come soon enough for all of them.

      • TB

        Not sure you can say the same for Tesla….they have cars out on the road and vehicle in production plus.

  • Super Rob

    It’s over for the small EV start ups. The big boys are in and with their money, engineering, and manufacturing knowledge, the start ups can’t compete. Dyson learned that he missed the window and was smart enough to quit. The money is in the race for the long range, quick recharge solid state battery.

    • Smith

      Dyson did not miss the window, there is no window. Just like Tesla is learning, although Elon will never admit it, the EV segment is impossible to develop alone, you have to have profitable ICE vehicles in the line up in order to pay for your playing in the EV segment. that is what Dyson realized, you cannot make it work on EV alone, nt for another 10 years or more.

      • Astonman

        He may not have admitted it but awhile back he offered his patents to anyone who was interested. People thought he was crazy. He knew the cost would go down in batteries if more people got involved.

    • MarketAndChurch

      I think EV start ups might be able to succeed but it would require them to license platforms/architectures and technologies to one another to do so, because there’s no full-on competing with Amazon, VW, Google, GM, etc.

      In other words, knowing consumer behavior, their main competitors aren’t each other, but the large players with deep pockets.

  • Porkopolis

    Faraday missed all the government cash sucked up by Musk… White privilege, right 2PacksofCarPoop?

    • Astonman

      Tesla met the threshold the government imposed. It’s still available to all the companies. What are you talking about?

  • Mr. EP9

    This dude is hosed. When the Chinese told him to return to settle his debts he should have done it and got it out of the way. Now look at him. He’s the worst thing to happen to Faraday Future and the company probably would have fared slightly better without him at the helm.

    • Smith

      He would have gone to jail if he returned, and never heard from again. maybe not a bad thing for us, but bad for him.

  • Smith

    Surprise, surprise!

  • Astonman

    But the tax credit is still there for any manufacturer until they hit the limit. The established firms will definitely be the ones since almost every company after Tesla has failed. Got it on 2PacsofCarscoops. So there – I read your drivel 🙂

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