On January 3, Liu Hong, a former general counsel for electric car company Faraday Future (hereinafter FF), founded by Jia Yueting, filed a lawsuit on Wednesday seeking $100 million in compensation for FF, including $6.4 million in cash and about $100 million in shares in Smart King, a Faraday subsidiary, reported Bloomberg.
Reported that liu hong filed a petition to the federal district court in manhattan's southern district of new york, ff claimed in 2018 that a $2 billion financing was under way, making him overestimate its future prospects, and as a way to lure him from the law firm mayer brown and join ff. But the financing never really worked out, and by the end of 2018, the FF had only received about $800 million in investment, and that part of the money was not enough to support the operation of the FF itself, and then the financial situation was getting worse.
In the pleadings, Liu Hong listed at least six litigation grounds to the court: breach of contract, violation of the Securities and Exchange Law of the United States, violation of the Securities and Exchange Commission Act, fraud induced by false information, illegal dismissal, intentionally causing mental loss to the litigants, etc., and demanded that FF pay its compensation and shares, as well as related expenses and interest.
Liu Hong has had nearly 30 years of professional, business and management experience in the global legal field, investment banking and market regulation, including working as a global equity partner in several global law firms and chairman and managing partner of Asia Pacific and Greater China operations, joining FF in August 2018, and serving as FF Global Chief Executive Officer, Global Executive Vice President, and Chairman of the Global General Counsel and Functional Committee, responsible for global legal affairs, government affairs, administrative affairs and capital operations.
However, only half a year later, Liu Hong was fired in February 2019. Liu said it did not receive a previous FF promise of separation compensation, which included $6 million in cash and 20 million shares of Smart King, a unit of FF that is worth about $100 million.
Not only that, more confusingly, liu hong's lawsuit also involved a number of information about jia yueting's personal bankruptcy reorganization. Before filing for a personal bankruptcy reorganization, Mr. Jia sold Oceanview, which owns several mansions, to a female associate for $6.5 million, according to Mr. Liu, who had recently married Mr. Jia's nephew.
Last october, letv founder jia yueting filed for personal bankruptcy restructuring in the u.s., with nearly 200 creditors, according to disclosed bankruptcy filings. It expects $5-$1 billion in personal assets (3.5 billion to 7 billion yuan) and $1.010 billion in debt (7 billion to 70.5 billion yuan).
Under the reorganization plan, Jia Yueting hopes to transfer all assets to creditors through the creditor trust, which is controlled and managed by the creditor committee and the trust trustee. After the scheme is completed, Jia Yueting will no longer hold any stake in FF. However, so far, Jia's personal bankruptcy filing has not been supported by creditors, and its original first creditors hearing is expected to be postponed until at least early January 2020.
And while mr. jia is scrambling to respond to the bond crisis, ff's first production car has been slow to deliver. Shortly ago, according to Carsten Breitfeld, chief executive of FF, there were about $100 million needed to produce FF91 and FF81. Its main mission in China is to negotiate with some of China's investment institutions, as well as with domestic car companies, to negotiate production of the FF91 in China.
According to previous plans announced by the company, the FF91 will be delivered to first order users next year, with an initial annual capacity of 10,000 units, up to 100,000 units a year depending on order conditions. And the FF81, which is built on the same platform as the FF91, will use smaller sizes and a slightly shorter range to get more sales at a lower price, and is expected to achieve pre-production by the end of next year.