Founder Faraday Futuro and former CEO Jia Yueting have handed Head 11 bankruptcy to a Delaware court, in an attempt to validate its many debts in China. The Chinese official claims he owes $ 3.6 billion to more than 100 creditors, thanks in large part to the failure of LeEco, the technology company built there. The bankruptcy collection is an important milestone in Jia’s history relevant in the history of credit fraud, which led to him being named nationally, the black list number in China aroused him move to the United States in 2017.
Before going to court with Chapter 11, though, Jia offered to pay off the debts on a trust backed by the value of his share in Faraday Futuro. This trust is only paid to creditors only when the project has been published. (This is similar, but different from Faraday Future’s plan set out earlier this year for creditors, due to Birch, Lake of the Friends, a new Chicago company.)
90% of Jia of the individuals or companies he owes to him must agree to this November 8th amendment plan. When the plan is signed, however, these debts must agree to free Jia (and his wife) from all debts and the failure of the claims that have been settled against him.
At the same time, Jia is asking his creditors to vote for Chapter 11 bankruptcy as a supplementary plan. This way of repaying will be the same – and Aij will use his top spot in the company to pay off his debts after the IPO – but with a lot of involvement and oversight the court, he warned, could now be drafted. it will cost you more in the long run.
If it takes too long the plan may be in jeopardy, Jia says about the number of applications submitted. He and his lawyers say Jia and her creditors need to agree quickly. Otherwise, Faraday Future will not be able to raise money while borrowing Chinese debts. If Faraday Futuro is unable to raise money, the value of your property will fall into debt and, of course, creditors will have less chance of totaling. Faraday’s future, fundraising, means “the company will be forced to forfeit its assets and / or start bankruptcy operations”, Jia says.
If a plan is not approved, Jia warns that he may have to go to bankruptcy Chapter 7 to fill up all his assets, saying that it will pay less to lenders and so will Faraday Futuro continuing. It is also clear from the presentation that “there is no guarantee that the value of” Faraday “Future” now or in the future, “and” there is no hope that the market will sell [su capital] they develop. “
Some of Jia’s other possessions – including he owns a large house through a frame company on the California coast – is not used for trust, as it has been frozen for some time due to a number of court cases.
The bankruptcy fund has been providing a window into Faraday’s Future finances for the past year and a half. Even though the EV kicked off in 2018 with the US $ 8 million investment by Chinese trader Evergrande, it has already lost $ 477 million for 2018. As of July 31, 2019, Faraday Future has lost one of his $ 103 million debts is $ 159 million in debt accounts. The company’s total debt was $ 801 million as of July 31, and the bank had only $ 6.8 million in debt. Faraday Futuro has lost $ 2.15 million from construction.
Faraday Futuro has been working with Birch Lake, setting up the company, since March 2019. Birch Lake donated $ 15 million to Faraday Futuro in April to help with the lights. , the start-up will pay off the debt in September. to apply for a bankruptcy. The second debt of $ 45 million at the end of October, the company has already applied for an extension, according to submitted applications. It is unclear how the first loan will cost, but Faraday Futuro sold his land in Las Vegas, when a $ 1 billion factory was planned.
Jia resigned from Faraday Future’s run in September. He was followed by former BMW CEO Carsten Breitfeld who said the company was still trying to set up its luxury electric SUV (the FF91) to be produced by the end of 2020. The company happened last year in the scarcity of money, which resulted in hundreds of divisions and the separation of the principal owners, including Jia leaving him the sole creator.