Jia Yuetings application for personal bankruptcy? FF Response: Handled by the Domestic Debt Group

 Jia Yuetings application for personal bankruptcy? FF Response: Handled by the Domestic Debt Group

Author: Kang Yin, Securities Times

According to media reports, a source close to Jia Yuetings creditors disclosed that he had just received a document on his own initiative to apply for personal bankruptcy restructuring in American courts. 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 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.

In response to the news that Le Video founder Jia Yueting applied for bankruptcy restructuring, the FF official response media created by Jia Yueting said that Jia Yuetings personal debt problem was handled by the domestic debt group. There is not much information on FF at present.

Jia Yueting, who had promised to be responsible to the end, flew to the United States in July 2017 and said that he would return home next week. Investors have not seen a return date yet. After going to the United States to build cars, after breaking with Evergrande, Jia Yueting resigned as FF CEO in September this year and became CPUO (Chief Product and User Officer).

Jia Yuetings latest micro blog is still on September 3, I gave up everything just to make FF, repay the remaining guaranteed debts as soon as possible, and realize the dream of changing the automobile industry.

Lexus Holdings is under the flag of Jia Yueting. At present, the domestic debt problem of Jia Yueting is mainly handled by the Lexus Holding Debt Group.

On September 3 this year, Faraday Future (FF) announced the appointment of Bi Fukang as the global CEO, while Jia Yueting will resign as the former CEO and assume CPUO.

Before Jia Yueting announced his resignation, his debt situation was disclosed through FF at the end of August this year. On August 29, FF issued a statement saying that Jia Yueting, the founder of the company, had repaid more than $3 billion of domestic debt in the past two years. The Debt Repayment Trust Fund was established to solve the debt problem thoroughly as soon as possible.

It is reported that since the outbreak of the fund crisis in November 2016, Jia Yueting has been repaying debts through asset disposal and other means. After resigning as CEO, Jia Yueting said that he would solve the remaining personal guaranteed debt problem as soon as possible. Since the financial crisis broke out in November 2016, Jia Yueting has repaid $3 billion (about 21 billion RMB) of debt. FF said that in order to solve the debt problem as soon as possible, Jia Yueting also set up a debt repayment trust fund.

It is understood that under the legal framework of the United States, there are two ways of bankruptcy liquidation (Chapter7) and bankruptcy reorganization (Chapter11). Jia Yueting applied for bankruptcy reorganization (Chapter 11). Chapter11 refers to the situation that the enterprise or individual is insolvent at present, and the law allows the debtor to propose a reorganization plan to the creditor to defer repayment in a way of asset protection.

About Jia Yuetings application for personal bankruptcy reorganization in the United States, some creditors said in an interview that after completing the plan of personal bankruptcy reorganization and creditor trust, Jia Yueting solved the problem of personal debt, so that he could continue to promote and realize the maximization of the value of equity assets and creditor trust assets of FF as the founder and cpuo of FF, so as to make creditors through trust. Value-added assets achieve the goal of repayment of debts.

In fact, Jia Yuetings debt lawsuits are still ongoing. Only recently did Minsheng Trust agree to terminate the execution procedure for Lexin Holdings and Jia Yuetings 575 million creditors rights.

According to the judgment issued recently by the Beijing court, the total amount of money obtained from the disposal of the shares held by Jia Yueting (29.78 million shares) and the deduction of the funds account under Jia Yuetings name totals 73.04 million yuan, and has applied for the implementation of the Peoples Having Trust. Beijing No. 3 Intermediate Peoples Court said that the listing of shares in CTV has been suspended, and the executed person has no property to execute for the time being. The applicant approved the courts property investigation results. The applicant agrees to terminate this execution procedure in accordance with the law.

FF gold owner has changed many times

Since his arrival in the United States in July 2017, Jia Yuetings personal energy has mainly focused on the development of Faradays future (FF), which has become the final bargaining chip for its reversal.

The first gold owner of Jia Yuetings car was Hengda. In June 2018, Evergrande Health announced that it had acquired 100% of Hong Kong Shiying Company for HK$6.746 billion, becoming the largest shareholder of the company. According to the agreement signed between Shiying and FF shareholders on November 30, 2017, Shiying invested $2 billion in three years, accounting for 45% of Smart King. The $2 billion will be paid in three phases, namely, $800 million by the end of 2018, $600 million by 2019 and $600 million by 2020. But after spending $800 million quickly, Jia Yueting initiated a break-up between arbitration and Hengda.

FF, who lost its gold owner, found the Ninth City (NCTY) of Nasdaqs listed company in March this year. The two sides will establish a joint venture company focusing on R&D, production, marketing and sales of luxury intelligent Internet electric vehicles in China, and will work together to create a brand new luxury V9.

But until Jia Yueting resigned as FF CEO on September 3, FFs electric car still had little action.

On September 20, a news from FF Guanwei brought FF financing and mass production signals back to the public. The latest financing, IPO and product delivery strategic plan of FF91 was announced at the 919 Futurist Day in 2019. It is expected that the volume delivery of FF91 will be realized within nine months after the success of financing. FF said that when the IPO is completed within 12 to 15 months, the demand for capital at this stage will also drop sharply from the original estimated $2 billion to $850 million.

Source: Responsible Editor of Securities Times: Qiao Junjie_NBJ11279