(Yicai Global) March 20 -- A California court has officially approved the asset disclosure, bankruptcy and restructuring and the application for debtor-in-possession loans proposed by Jia Yueting, the beleaguered emigre Chinese serial entrepreneur embroiled in a slew of legal disputes, and has denied asset management firm Lancai's motion to reject Jia's bankruptcy and restructuring scheme, so the creditors' vote on the plan will thus go forward next month.
The tribunal's stamp means Jia's individual bankruptcy and restructuring will officially enter the voting process once relevant documents are sent to creditors, which marks the last step before the scheme's eventual implementation, Jia's debt-handlers said, online news outlet The Paper reported today. The green-light for debtor-in-possession financing will also provide key funds for Jia's restructuring and facilitate its smooth completion.
Jia will not seek to discharge his personal debts in China until his creditors recoup 40 percent of amounts owed from a dedicated trust set up for that purpose or their proportion from that source and/or other channels reaches 100 percent of the outstanding debt, under the latest draft of the proposed arrangement.
Creditors will have the right to dispose of Jia's assets frozen and pledged in China before the date his bankruptcy petition was filed, with this compensation excluded from the 40 percent. This plan will also allow creditors to earn 4 percent interest.
Jia founded Leshi Internet Information & Technology in Beijing in 2004. He then built the company into a conglomerate focusing on multiple businesses, including film, TV, smartphones and autos, leveraged by various financing sources. Leshi became mired in a chronic cash crunch in 2017, whereupon Jia absconded to settle in the US and create new energy vehicle brand Faraday Future. He petitioned for personal bankruptcy in the US in October to extricate himself from his dire financial straits and attendant debt disputes in China.
Editor: Ben Armour