LOS ANGELES--(BUSINESS WIRE)--Faraday Future (FF), a California-based global intelligent mobility company, today announced that Yueting Jia (YT), the Founder and CPUO of Faraday Future (FF), has achieved very positive results at the hearing held by the United States Bankruptcy Court for the Central District of California on Thursday, March 19. YT’s Chapter 11 Disclosure Statement and the motion for approval of DIP Financing were approved by the Court. Meanwhile, the Court also denied Shanghai Lan Cai Asset Management Co., Ltd. (SLC) motion to dismiss the Chapter 11 case with prejudice.

Accordingly, YT's Chapter 11 Plan can now be voted upon by his creditors. Assuming creditors vote in support of the plan and the Court approves it, YT can immediately begin to implement it thereafter. This important progress will in fact benefit FF’s financing efforts and the implementation of its China-US dual home strategy.

The United States Bankruptcy Court for the Central District of California approved YT's Fourth Amended Chapter 11 Disclosure Statement, granted his motion for approval of debtor in possession (DIP) financing, and denied with prejudice the motion to dismiss the chapter 11 case filed by Shanghai Lan Cai Asset Management Co., Ltd. (SLC) Accordingly, YT's Third Amended Chapter 11 Plan can now be considered and voted upon by his creditors. Assuming creditors vote in favor of the Plan and the Court approves it, YT can immediately begin to implement it thereafter.

Some of the details of yesterday’s ruling follow below:

In denying SLC’s motion, the Court found that SLC’s allegation that YT’s bankruptcy case was commenced with a lack of good faith was supported by “nil or de minimis” evidence, meaning SLC presented no evidence or evidence too trivial to merit consideration. The Court found that the initial filing of YT’s bankruptcy case in the District of Delaware did not show YT lacked good faith. The Court also stated that, during the course of his chapter 11 case, YT had responded to inquiries at two “Meetings of Creditors” conducted by the U.S. Department of Justice’s Office of the United States Trustee, provided voluminous documentation to the Official Committee of Unsecured Creditors (Committee) and its professionals, facilitated the appearance of various witnesses for the interview by the Committee, and provided formal testimony over two days of depositions by the Committee and one of its members, all of which demonstrated that YT has exhibited no lack of transparency in his chapter 11 case. The Court remarked that YT was prosecuting his chapter 11 case with “alacrity” and that, in formulating his Plan, he was actively engaged with the Committee.

The Court’s approval of the Disclosure Statement means that the voting process will start once solicitation packages are mailed to creditors. This is a major milestone. At the same time, the approval of DIP financing will provide critical financing to YT’s chapter 11 estate to support the completion of the case.

YT made significant concessions during several rounds of negotiations with his creditors, including no longer requesting to release claims against him in China until the creditor distributions from the trust reach 40% of the allowed claim allocation amount, or until the creditor distributions from the trust and other distributions reach 100% of the allowed claim allocation amount, whichever comes earlier. Creditors will have the right to continue to dispose of assets that had been frozen, collateralized or pledged before the petition date in China, and the amount of such recovery will not be included in the 40% mentioned above. At the same time, holders of the allowed claims will receive 4% interest on the outstanding principal amount of their claim as of the petition date and potentially earn over 1 billion US dollars in upside based on a scaling model. The above concessions demonstrate YT's great confidence in Faraday Future’s (FF) strategy, as well as his belief that he has completely addressed his debt issues.

Considering the strong need for economic growth in China, we expect to see more liquidity in its supply and take stronger measures to attract investment. Lately, many institutions including local governments and equity investors have been in touch with FF to discuss equity financing and China localization plans.

As part of the restructuring plan, along with the implementation of the Partnership structure, YT has yielded top-level decision making to the partners’ committee. FF's innovation in the top-level governance structure is setting a solid foundation for it to become a transformative leader in the industry.

YT's restructuring mainly addresses his debts arising out of personal guarantees he issued in connection with obtaining financing for the Leshi entities. (Therefore, if the Chapter 11 plan is confirmed, it will resolve issues with most of the Leshi entities’ creditors and equity investors).

YT's debt project team has maintained good communication and is working actively with the listed entities of Leshi as well as relevant monitoring authorities in China regarding Leshi's debt issues. Since July of 2017, a total of 2.7 billion RMB of debts related to the listed entities (including Lerong Zhixin) have been addressed, the details of which can be found in the various press releases of the listed company. The creditor trust created in YT's chapter 11 plan also has taken into consideration YT’s Leshi.com-related debts.

ABOUT FARADAY FUTURE

Faraday Future (FF) is a California-based global intelligent mobility eco-system company. Established in May 2014, FF is a global company, headquartered in Los Angeles. FF's vision is to create a shared intelligent mobility ecosystem that empowers everyone to move, connect, breathe and live freely.

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Contacts

John Schilling
Director, Public Relations
310-956-6488
john.schilling@ff.com