Creditor trust will be created as part of filing 

Faraday Future, the Chinese electric vehicle^[1]
company’s founder and former Chief Executive Jia Yueting has filed
for bankruptcy in the U.S. 

In a statement^[2]
on the company’s Website, Faraday Future said its founder filed for
bankruptcy and restructuring under Chapter 11 in the U.S. to
address his personal debts in China. The Chinese tycoon reportedly^[3]
owes more than 100 creditors as much as $3.6 billion.

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Creditor trust will be created as part of
filing 

As part of the filing^[5], a creditor trust was
created for his creditors. The creditors’ trust will be jointly
managed by a committee of creditors and the trustee. All of his
existing interest in Smart King, the holding company for Faraday
Future, will be transferred to the creditor trust to better protect
creditors as well as pay back his debt. The bankruptcy filing
won’t impact the company or its normal operations. 

“This Plan provides YT an opportunity to address his
personal debts, help facilitate FF’s equity financing efforts and
prepare for an IPO, and further advance the implementation of FF’s
US-China dual home market strategy,” wrote the company in the
statement. 

Faraday Future founder to still have a role in the
company

The company said Jia will be involved in Faraday Future^[6]
and that the filing will not impact the ownership of employee stock
options or shares acquired by the company when employees exercised
stock options. The company plans to continue to use stock options
to recruit and retain talent.  In order for the plan to
proceed Jia needs 90% of creditors to back the plan by 8 November.
As part of the deal, Jia and his wife get released
from all personal liability and existing claims have to be
dropped.  If they don’t approve, he has a Chapter 11
bankruptcy plan as the backup. 

The announcement marks a major development in the story of
Jia who was known for taking on a huge amount of debt. According to
media reports, he was added to China’s debtor backlist in 2017,
which prompted him to set up residency in the U.S.  Jia
stepped down as CEO of Faraday Future last month. Carsten Breitfeld
of BMW became CEO. The company is working on an electric SUV to be
rolled out at the end of next year.