Jia Yueting took the initiative to apply for personal bankruptcy and reorganization. If successful, he will no longer hold FF equity.
Editor’s note: This article is from Daily Economic News, author Song Kejia Li Shaoting Li Xing, editor Zhao Yun Xiao Yong.
In the news about Jia Yueting, the following picture is used frequently. Some netizens ridiculed that the photo name is “Suffocating for a dream”.
Image Source: Visual China (data map)
At the beginning of last month, Jia Yueting, who resigned as the CEO of FaradayFuture (Faraday Futures, hereinafter referred to as FF), had long talked about the word “dream” on Weibo: “I gave up everything, just to make FF As soon as possible, the remaining guarantee debts will be fully repaid, and the dream of transforming the automobile industry will be realized.”
The latest news is that Jia Yueting has taken another step from “abandoning everything”. According to the news on October 11th, on the occasion of the piloting of the personal bankruptcy system in some cities in China, Jia Yueting, the founder of the LeTV department in the United States, also reported that he intends to apply for personal bankruptcy restructuring in the United States.
Jia Yueting actively applied for personal bankruptcy and reorganization, and if successful, no longer holds FF equity
On October 11, an insider close to Jia Yueting’s creditors revealed to Yu’s news that he received a document from Jia Yueting’s initiative to apply for a personal bankruptcy reorganization (Chapter 11 Bankruptcy Reorganization).
The content of the document shows that Jia Yueting will transfer all assets to the creditor through the creditor trust, which is controlled and managed by the creditor committee and the trustee. This also means that the creditors will get all the assets of Jia Yueting and their income rights in advance, and Jia Yueting will no longer hold any FF equity.
LeTV Holdings is part of Jia Yueting. At present, Jia Yueting’s domestic debt problem is mainly handled by the LeEco Holding Debt Group.
The news said that regarding Jia Yueting’s application for personal bankruptcy and reorganization in the United States, a person from the LeEco Holding Debt Group said: “Although it is not clear about the specific progress, as far as I know, Mr. Jia Yueting has been planning related debt repayment plans. The reason why he is willing to make such a huge personal sacrifice, to give up all the transfer of personal assets to creditors, is to do their utmost to completely solve the personal debt problem and make FF.”
The person said that the personal debt that really belongs to Jia Yueting is very small, and the large amount of debt is the debt guaranteed by the individual for the company, and has already repaid more than 20 billion yuan. Earlier, an informed source close to FF introduced that Jia Yueting also planned to establish a part of the FF part of the personal debt repayment trust fund as a domestic debt repayment fund.
It is still unclear how much Jia Yueting will have a voice in FF if the aforementioned bankruptcy application falls.
Accordingly, under the US legal framework, there are two ways of bankruptcy liquidation (Chapter 7) and bankruptcy reorganization (Chapter 11). Jia Yueting applied for bankruptcy reorganization (Chapter 11).
Bankruptcy Reorganization (Chapter 11) refers to the case where a company or an individual is insolvent, and the law allows the debtor to propose a reorganization plan to the creditor and postpone the repayment in a certain asset security manner.
Bankruptcy and liquidation (Chapter 7) means that a company or individual declares bankruptcy and is taken over by the liquidation team to liquidate the company or individual assets by liquidation, evaluation, processing, and distribution.
Through the US Courts official website (uscourts.gov)
After the above news, the FF official founded by Jia Yueting told Tencent News that Jia Yueting’s personal debt problem was handled by the domestic debt team. There is not much news on the FF side. The debt group members did not respond to Tencent News’s request for comment.
Tonight, the FF-related person in charge of the daily economic news (micro-signal: nbdnews) interview did not deny Jia Yueting’s application for bankruptcy, only that there is no more news for this matter. Disclosure.
Lawyer: Jia filed for bankruptcy in the US and could not solve it.China’s debt
Since the outbreak of the LeTV ecological crisis in November 2016, Jia Yueting has been plagued by negative news such as securities bond disputes and court freeze funds for more than three years.
In the first half of 2017, there was a media inventory. LeTV was in arrears with suppliers of about 10 billion yuan, and financial institutions had loans of more than 20 billion yuan. The overall debt was nearly 35 billion yuan. As the then chairman of LeTV, Jia Yueting took responsibility for most of the debts.
After the break of the Leshi capital chain, Jia Yueting publicly promised that he would bear all liabilities. In August 2017, with the support of Sun Hongbin, LeTV repaid the financial institution’s arrears of 15 billion yuan, but still has more than 10 billion yuan of debt outstanding.
Since coming to the United States in July 2017, Jia Yueting’s personal focus has focused on the development of Faraday’s Future (FF), and FF has become the support of Jia Yueting’s “turning over”. The creditor trust controlled by Jia Yueting’s personal debt creditor is closely related to the asset value of FF.
The previous daily economic news (micro-signal: nbdnews) has reported that on September 3 this year, FF announced the appointment of Bi Kang, the founder of the company, as the global CEO, to replace the FF founder Jia Yueting who resigned. Jia Yueting transferred to FF’s CPUO (Chief Product and User Officer).
Dr. Bi Fukang (Source: FF)
In the statement at the time, FF also revealed that Jia Yueting had repaid domestic debt of more than $3 billion (about 20 billion yuan) in the past two years. However, the statement that “Jia Yueting repaid 20 billion yuan of debt” appeared as early as 2017, and it is not new.
The news quoted people familiar with the matter as saying that Jia Yueting will take the initiative to provide creditors with additional special protection after submitting this personal bankruptcy reorganization. Among them, all domestic creditors still retain the right to dispose of the frozen assets of Jia Yueting and other debtors; the original debtors such as the former LeTV related enterprises will continue to perform their debt repayment obligations; compared with the original request for repayment of debts to Jia Yueting through the guarantee procedure, Now creditors pass the creditor trust equivalent to get all the assets and income rights of Jia Yueting in advance, and all creditors will also be entitled to equality and full repayment of debts in the future.
“Compared to the need to repay debts to Jia Yueting through a security right, the creditor trust allowed us to gain confidence in obtaining full debt repayment by gaining all the personal assets and income rights of Jia Yueting in advance.”