Reported today on The Verge For the full article visit:
Reported today in The Verge.
DOJ intervenes in Faraday Future founder's bankruptcy after 'dishonest behavior'
The Department of Justice has accused Faraday Future founder Jia Yueting of "engaging in dishonest behavior" during his Chapter 11 bankruptcy proceedings, and it has filed a motion to appoint a new trustee to take control of the Chinese billionaire's estate.
The new motion, if approved, could dramatically change the course of Jia's bankruptcy case, which involves billions of dollars of debt owed to more than 100 creditors in China, and which has been hotly contested in the two months since he filed. While Jia claims his bankruptcy does not directly involve Faraday Future, he has claimed that a speedy outcome is necessary in order for the EV startup to raise the $850 million it so desperately needs to finally put its first vehicle into production late next year.
One of Jia's lawyers, Jeffrey Dulberg, a partner at the firm Pachulski Stang Ziehl & Jones LLP, tells The Verge he believes the motion is "based on factual inaccuracies and misapplications of law to fact" and says it is "without merit."
A lawyer for one of Jia's creditors, who was granted anonymity so they could speak freely about the case, called the filing a "nuclear bomb" and a "scathing attack." This lawyer also said they were shocked the US Trustee is taking such drastic action in what they consider to be relatively early stages. "For them to get involved this early is almost unheard of, [but] the US trustee carries a lot of weight with the judge."
Jia filed for Chapter 11 bankruptcy back in October in an attempt to settle nearly $4 billion in both personal debt and money owed by his failed Chinese tech conglomerate, LeEco. He laid out a plan that would offer each of those creditors different-sized
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