Jia Yueting, founder and former CEO of Faraday Future has filed for Chapter 11 bankruptcy in Delaware to “address his personal debts in China,” according to a statement provided by the company on October 13, 2019. The Los Angeles-based company, which is focused on the development of electric vehicles and advertised as a rival to Tesla, stated this matter will not affect any of their normal business operations.
In his filing, the Chinese entrepreneur claimed that he owes approximately $3.6 billion to over one hundred creditors. The company’s statement also stated that in connection with the filing, Jia proposed transferring all his existing equity in Faraday Future’s parent company, Smart King Ltd, to set up a creditor trust to repay his debts. The company noted that this plan would also support its “equity financing efforts and prepare for an IPO.” However, with negative press related to Jia’s debts and an investigation by the China Securities Regulatory Commission relating to another company where Jia served as CEO, the IPO plans may not raise as much as projected.
Founder of Electric Vehicle Startup Faraday Files Bankruptcy
Statement Regarding Faraday Future Founder Yueting Jia's Bankruptcy and Restructuring and Establishment of Creditor Trust
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