Faraday Future’s founder and former CEO Jia Yueting has filed for Chapter 11 bankruptcy in Delaware court in a bid to satisfy his myriad debts in China. The Chinese tycoon claims he still owes around $3.6 billion to more than 100 creditors, thanks, in large part, to the collapse of LeEco, the tech conglomerate he founded there. The bankruptcy filing marks a major turn in the story of Jia’s prolific history of taking on debt, which led to him being named to a national debtor blacklist in China and sparked his move to the United States in 2017.

Before proceeding in court with Chapter 11, though, Jia is offering to satisfy those debts through a trust backed by the value of his ownership stake in Faraday Future. This trust will only pay out to creditors if and when the startup goes public. (This resembles but is separate from the plan Faraday Future laid out earlier this year for suppliers who are owed money, which was put together by Birch Lake Associates, a Chicago-based restructuring firm.)

If creditors don’t agree to the plan, Faraday Future may not be able to raise money, Jia says

Jia needs 90 percent of people or businesses to whom he owes money to approve this restructuring plan by November 8th. In signing on to the plan, though, these creditors also have to agree to release Jia (and his wife) of all personal liability and drop existing claims against him.

At the same time, Jia is asking his creditors to vote on Chapter 11 bankruptcy as a backup plan. This path to restitution would happen roughly the same way — with Jia leveraging his stake in the company to eventually pay off his debts after an IPO — but with more involvement and oversight from the court, which he warns could draw the process out and ultimately cost more.

Any delay could put the whole plan at risk, Jia claims in the filings. As he and his lawyers put it, Jia and his creditors need to come to a swift agreement. Otherwise, Faraday Future won’t be able to raise money while his Chinese debts hang in the balance. If Faraday Future can’t raise money, the value of his ownership stake will drop, which, in turn, means creditors have even less chance of being made whole. Faraday Future not being able to raise money also means the company “may be forced to liquidate its remaining assets and/or initiate bankruptcy proceedings” of its own, Jia admits.

If neither plan is approved, Jia warns he may have to declare Chapter 7 bankruptcy and fully liquidate all of his assets, which he says would result in smaller payments to creditors, and also affect Faraday Future’s ability to continue. There is also a clear warning in the filings that there can be “no assurance as to the value of” Faraday Future “at this time or in the future,” and that “there is no expectation that a market for [his equity] will develop.”

Some of Jia’s other personal assets — including the mansions he owns through a shell company on the California coast — are not being used to back the trust since they are temporarily frozen due to a number of ongoing court cases.

The bankruptcy filings also provide a window into Faraday Future’s finances for the last year and a half. While the troubled EV startup began 2018 with an $800 million injection from Chinese real estate conglomerate Evergrande, it ultimately posted a loss of $477 million for 2018. Through July 31st, 2019, Faraday Future lost another $103 million and owed $159 million in accounts payable. The company’s total liabilities added up to $801 million on July 31st, and it had just $6.8 million in the bank. Faraday Future has lost $2.15 billion since its founding.

Faraday Future has lost $2.15 billion to date, and it still has $734 million in liabilities

Faraday Future has been working with Birch Lake, the restructuring firm, since March 2019. Birch Lake loaned $15 million to Faraday Future in April to help keep the lights on, and the startup paid back that loan in September, according to the bankruptcy filings. A second loan of $45 million is due at the end of October, for which the company has already requested an extension, according to the filings. It’s not immediately clear how the first loan was repaid, but Faraday Future did recently sell the land it owned in Las Vegas where it once planned to build a $1 billion factory.

Jia stepped down from running Faraday Future in September. He was replaced by former BMW executive Carsten Breitfeld who reaffirmed that the company is still trying to get its luxury electric SUV (the FF91) into production in late 2020. The company spent the last year in a cash crunch that resulted in hundreds of layoffs and the departure of key executives, including Jia’s only remaining co-founder.