Prior to this, there were media reports that some creditors tried to obtain the rights and interests of their claims by freezing and auctioning the FF shares held by Jia Yueting. However, some creditors also said that this is not a fair way to deal with, most creditors hope that FF will be successful after full debt repayment. This should be the inner secret of Jia Yuetings application for bankruptcy restructuring, but also for other creditors to be treated equally.
So, does FF have a future? What about the creditors of Le Video Network?
Jia Yueting grabs headlines
The document shows that Jia Yueting will transfer all assets to creditors through creditor trust, which is controlled and managed by creditor Committee and trustee. This also means that creditors will get all of Jia Yuetangs assets and earnings rights ahead of time, and Jia Yuetang will no longer hold any equity in Faraday Future (FF), an electric car maker.
According to reports, there are two ways of bankruptcy liquidation (Chapter7) and bankruptcy reorganization (Chapter11) under the legal framework of the United States. Jia Yueting applied for bankruptcy restructuring (Chapter11).
Chapter 7 means that an enterprise or individual declares bankruptcy and is taken over by the liquidation team, which liquidates, evaluates, processes and distributes the assets of the company or individual.
It is reported that Jia Yueting will actively provide additional special protection to creditors after submitting personal bankruptcy restructuring. Among them, all domestic creditors still retain the right to dispose of the frozen assets of Jia Yuetang and other debtors; former Lexin related enterprises and other original debtors will continue to fulfill their debt repayment obligations; compared with the original claim to Jia Yuetang through the security procedure, creditors through the creditor trust now have obtained all the assets and income rights of Jia Yuetang in advance. Creditors will also have equal rights and the right to pay their debts in full in the future.
Faraday entered the post-Jia Yueting era before
The action of Jobs also seems to be preparing for FF preservation.
On September 3 this year, Jia Yueting announced a blockbuster message on his microblog: Faraday formally announced the appointment of Dr. Bifukang as the global CEO in the future. At the same time, Jia Yueting, the future founder of Faraday, will resign as CEO and become CPUO (Chief Product & User Officer). He will be responsible for the overall implementation of the Internet ecosystem strategy, leading the related work of artificial intelligence and product definition.
Prior to this, foreign media reported that Faraday is restructuring in the future, will introduce a partnership system, the top management of the company to the Partners Committee, its CEO Jia Yueting will leave the company.
So far, Faraday entered the post-Jia Yueting era. On September 19, Faraday Future (hereinafter referred to as FF) held 919 Futurist Day at its headquarters in Los Angeles, USA. This is FFs second 919 Futurist Day event. In this event, FF announced a new strategic plan for the post-Jia Yueting era, including financing, vehicle production and IPO.
It is reported that after Bi Fukang took office, FF product delivery planning adjustment, R&D and operation cost reduction, organizational structure adjustment and more important financing strategy adjustment were promoted, and made a new strategic plan for the people. FF is expected to deliver FF91 volume within nine months of successful financing, and complete the public release of FF81 within 15 months, as well as the development of future models and next generation core technologies; in the aspect of IPO, FF announces that it will achieve IPO within 12 to 15 months after completion of financing.
According to public data, in January 2017, Faraday officially released its first mass-produced car FF91 in Las Vegas, with an official voyage lasting more than 700 kilometers and an acceleration of 2.39 seconds at 0-100km. Originally thought that Faraday would be offline in 2018 as planned, but with the outbreak of Jia Yuetings personal debt problem, Faradays future situation has also changed dramatically.
On July 4, 2017, shortly after Jia Yueting left the United States, Faradays future official announced that he had abandoned the Nevada plant construction plan; in November 2017, Jia Yueting was listed as the executor of dishonesty by the court, and his future financing channels were closed because of the bankruptcy of his credit.
When Jia Yueting unexpectedly established a relationship with Xu Jiayin and Hengda Health became the largest shareholder in Faradays future with HK$6.746 billion on June 25, 2018, and planned to invest US$2 billion in three years, the outside world once thought that Faradays future had a turning point.
It can be said that FF has placed all the hopes of creditors, if FF can successfully reverse, then there is the possibility of debt repayment in full. Previously, there were also creditors who advocated selling FFs equity to obtain debt as soon as possible.
On the occasion of Jia Yuetings application for personal bankruptcy, the information from the Finance Associated Press on October 11 said that the court had recently terminated the execution procedures of the Peoples Livelihood Trust v. Lexin Holdings and Jia Yueting case. The Peoples Livelihood Trust recovered about 73.037 million yuan of arrears. According to the courts ruling, the court disposed of 29.78 million shares held by Jia Yueting. The proceeds from the disposal of the above-mentioned shares and the deduction of the funds account under Jia Yuetings name totaled 73.037 million yuan. The peoples livelihood trust has been repaid, but there are still about 400 million yuan in arrears that have not been recovered. So how much money does the legendary Jobs owe?
According to previous reports in Time Weekly, in the first half of 2017, the crisis of Lexins capital chain broke out in an all-round way. Lexin owes about 10 billion yuan to suppliers, 20 billion yuan to financial institutions, and nearly 35 billion yuan to the whole debt. Jia Yueting, as the chairman of Le Video Network at that time, assumed joint and several liabilities for most of the debts.
After the breakdown of Lexins capital chain, Jia Yueting openly promised that he would bear all the liabilities. In August 2017, with the support of Sun Hongbin, Lexin was happy to repay 15 billion yuan of arrears owed by financial institutions, but there were still more than 10 billion yuan of outstanding debts.
However, according to Le Videos semi-annual report in 2019, its asset-liability ratio has reached 268%, and the total current and non-current liabilities are still as high as 21.6 billion. As of June 30, 2019, the balance of arrears owed by major shareholders (referring to Jia Yueting) and their actual controlling enterprises to the merger scope of listed companies was about 1.985 billion yuan, according to the announcement of Le Video Network.
Le Video also announced that since August 2018, the two sides have conducted many negotiations and have not reached agreement on the key points of debt repayment.
In July 2019, the National Development and Reform Commission (NDRC) and other thirteen departments jointly issued the Reform Plan for Accelerating and Improving the Exit System of Market Subjects, proposing to study and establish an individual bankruptcy system.
On the morning of October 9, Wenzhou City, Zhejiang Province, reported the first case of centralized liquidation of personal debts with substantive functions of personal bankruptcy and equivalent procedures.
Source: China Responsible Editor of Securities Dealers: Zhong Qiming_NF5619