Faraday Backer Files for Bankruptcy
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The founder of secretive electric vehicle startup Faraday reportedly declared bankruptcy in the U.S. after running up more than $2 billion in debts.
Bloomberg, citing court documents filed in Delaware, reports that under a debt restructuring plan, Jia Yueting plans to turn over his stake in the EV company to his creditors in China.
Jia, the founder of a sprawling Chinese tech company, emerged as the primary backer of Faraday as it rapidly \\u2014 and quietly \\u2014 grew from startup to a hundreds-strong staff in Los Angeles that purported to be preparing a challenge to Tesla for electric vehicle supremacy.
He took over as CEO in late 2017, after the company had rolled out an underwhelming prototype, announced plans for a $1 billion factory in Nevada and set a timetable to make its first cars. Its ambitions, however, were rapidly scaled back amid questions about its finances.
The company scrapped the Nevada plant for a smaller operation in California, then burned through hundreds of millions invested under a new partnership.
Most recently, the company formed a joint venture with a Chinese gaming company for another infusion of cash, and replaced Jia as its chief executive.
Jia\\u2019s creditors reportedly hope to be reimbursed \\u2014 at least in part \\u2014 with the proceeds from an initial public offering, although the filing conceded that might not raise as much as the company hopes, due to, Jia's filing said, \\u201cnegative press.\\u201d
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