Faraday Founder Files For Bankruptcy: What Does It Mean For The Tesla Rival?

The founder and CEO of electric vehicle maker Faraday Future, Yueting Jia, has filed for Chapter 11 bankruptcy in the U.S. The bankruptcy filing addresses the founder’s personal debts in China, the company said in a statement.

Through the restructuring process, Yueting will set up a creditor trust that will be jointly managed by a committee of creditors and the trustee. All existing equity interest in Faraday will be transferred to the trust “to better protect his creditors and repay his debt,” the company said.

However, the company said the normal operations at Faraday will not be affected but will rather prepare Faraday for an IPO. Yueting will continue his work with Faraday and no employee stock ownership or shares in the company will be impacted by the bankruptcy filing, according to the automaker.

Yueting’s personal net debt is about $2 billion, Reuters reported.