Faraday Future at serious risk of disappearing due to its founder's bankruptcy

Until recently, it seemed that the only company created specifically to bring electric cars to market that could succeed was Tesla. But Elon Musk’s company was recently presented with a fairly important rival a few months ago. It was Faraday Future, a Chinese-backed company that planned to position itself ahead of Tesla and wanted to dethrone it at the forefront of electric car development.

But this week we have learned that the Chinese company has suffered a serious setback that could lead to its disappearance. And all of this is because Jia Yueting, the company’s founder, has filed for bankruptcy in the United States to deal with a debt of 3.6 billion dollars owed to between 100 and 199 creditors in his home country.

This bankruptcy situation has been triggered to gain time and allow the Asian magnate to restructure the debt with the various creditors and save the company, the development of its electric car, and everything that, presumably, was to come afterwards.

Apparently, part of those debts have already been repaid, or so Yueting claims. He says he has around 1.6 billion dollars in frozen assets in China, which will be used to pay off part of the debt. In addition, he has already managed to repay another 3 billion dollars, so the debt could be considerably reduced.

To finish settling the millions still outstanding, Yueting has made all his assets in Smart King, the parent company of Faraday Future, available to his creditors. In this way, although he remains outside the project, it could move forward in the hands of those who are today creditors of debts that are owned by the millionaire and his wife.

Yueting will not be entirely removed from the company, since his plan involves taking it public later and recovering the money invested in cancelling the debt and regaining control of the company. Although that still seems very distant, and he will first have to face paying all that money, which will keep him out of the business for a time.