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Recently, some Chinese cities have launched policies to pilot a personal bankruptcy system, while media reported that Jia Yueting recently submitted relevant documents to the US court and volunteered to file for personal bankruptcy reorganization. After applying for personal bankruptcy reorganization, Jia Yueting will transfer all his assets to creditors through a creditor trust, which is controlled and managed by the creditor committee and the trust trustee.

It also means that creditors will get all of Jia Yueting's assets and their income rights in advance, and Jia Yueting will no longer hold any stake in Faraday Future Faraday Future, an electric carmaker. At present, Faraday has not disclosed similar information in the future.

Leeco said that they do not know the specific progress, but what is certain is that Mr. Jia Yueting has been planning the relevant debt repayment plan and is willing to make huge sacrifices. People familiar with the matter also mentioned that the debt that really belongs to Jia Yueting is very small, a large amount of debt is the debt guaranteed by the individual for the company, and more than 20 billion yuan has been repaid.

Jia Yueting also plans to set up a personal debt repayment trust fund with a partial stake in FF as a domestic debt repayment fund, according to people close to FF.

It is not clear how much say Jia Yueting will have in FF if the bankruptcy filing falls.

According to reports, under the framework of US law, there are two ways of bankruptcy liquidation (Chapter 7) and bankruptcy reorganization (Chapter 11). Jia Yueting filed for bankruptcy restructuring (Chapter 11).

"this approach is extremely unfair to the vast majority of creditors, and other creditors do not even have the opportunity to repay their debts at all, and all creditors are pinning their hopes on maximizing the value of assets after the success of FF and getting full debt repayment," people familiar with the matter asked him. 'This should be the inherent secret of Jia Yueting's filing for bankruptcy reorganization, and it is also for other creditors to be treated equally,'he said.

It is worth mentioning that, according to the current legal requirements of China, bankruptcy liquidation or bankruptcy reorganization are only for enterprise entities, personal bankruptcy liquidation and personal bankruptcy reorganization related laws are still in the process of being promoted. In July 2019, thirteen departments, including the National Development and Reform Commission, jointly issued the "accelerating the improvement of the Reform Plan for the withdrawal system of Market entities", proposing to study the establishment of a personal bankruptcy system.

Compared with the personal bankruptcy reorganization (Chapter-11) filed by Jia Yueting, if the opportunity of low debt repayment is obtained in a way similar to personal bankruptcy liquidation (Chapter-7), this case also means that the relevant legal system is being explored in China.

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