According to foreign media reports, according to a new court document submitted on Thursday, a federal district judge in California temporarily suspended the equity of Faraday's future CEO Jia Yueting in the company and located it. California luxury homes issue protection orders.
In the past two weeks, this is the second time that Jia Yueting’s shareholding in the company has been frozen.
At the time of the court's decision, Faraday has had months of conflict with its main gold lord Evergrande Group, which has caused hundreds of people to leave their jobs without pay, and now the cash of this electric car startup is on the verge of exhaustion.
Earlier this week, a Chinese company called Shanghai Lazy Asset Management Co., Ltd. filed a lawsuit in the Central District Court of California, and the new freezing order was the result of the lawsuit. The company said that Jia Yueting never repaid the loan of RMB 50 million to LeTV, another streaming media service company, at the end of 2016.
Shanghai Lazy Asset Management said that the company submitted the case to China for arbitration and won the case, but Jia Yueting & ldquo; neither paid nor said that he intends to do so in the near future. ”
Jia Yueting has lived in the United States since the summer of 2017, after he has completely controlled the Faraday Future. Shanghai Lazy Asset Management finally decided to sue Jia in the US federal court and submitted an application for “confirming the arbitral award” this week, asking the judge to admit the ruling made in China.
Jia Yueting has been included in the debtor's blacklist in China, and its LeTV and other companies owe hundreds of millions of dollars to various creditors.
It is precisely because of this that Shanghai Lazy Asset Management Company has asked the US court to freeze Jia Yueting's assets, and the case will be heard by US courts. Specifically, the company asked US courts to freeze the 33% stake in Faraday's future company owned by Jia Yueting and issue a temporary protection order against a multi-million dollar California mansion owned by a shell company.
The lawyer of Shanghai Lazy Asset Management Co., Ltd. said in a document submitted to the court on Monday, “Although Jia Yueting is reported to be a person with huge wealth, his recent debt repayment record is very bad. ”
The lawyer used the document to request a temporary freeze on its stake on the grounds that he might be concerned that Jia Yueting might attempt to transfer his ownership of the company or cut off his relationship with the property because he had taken similar actions in the past. “There is a compelling reason to believe that Jia Yueting will also take measures to make the assets under the jurisdiction of the Court unusable for enforcement. ”
Judge S· James · S. James Otero on Thursday approved the request of Shanghai Lazy Asset Management. He wrote that, in view of the relevant provisions of the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (also known as the New York Convention, a multinational recognition of arbitral awards between more than 100 countries), the Federal Court “very May confirm & rdquo; arbitral award.
Jia Yueting’s future ownership in Faraday is crucial because it is the only factor that hinders Evergrande’s full control of electric vehicle startups. Evergrande owns 45% of the shares but has less voting rights.
Based on the loan principal plus interest, Shanghai Lazy Asset Management is seeking compensation of just over $11 million.
Faraday's future lawyers have recently valued Jia Yueting's shares in the company for $1.48 billion, and the total value of his homes is more than $20 million.
At least three creditors from China filed a lawsuit against Jia Yueting in the United States. One of the creditors accused Jia Yueting of setting up a “hundreds” of shell companies to evade debt. Jia Yueting’s lawyer and a future Faraday representative did not immediately respond to the reporter’s request for comment.
A spokesperson for Kobre & Kim law firm representing the two companies said that Shanghai Lazy Asset Management is a subsidiary of another Chinese entity.
Last week, it frozen the equity of Jia Yueting in another jurisdiction.
Another company, called To-Win Capital, filed a lawsuit against the Eastern Caribbean Supreme Court, which also required local courts to recognize cross-border arbitral awards.
The court has jurisdiction over two shell companies, FF Peak Holdings and FF Top Holdings, and Jia Yueting uses the two companies to protect their equity. According to Kobre & Kim law firm, To-Win Capital provided funding for both court cases.
For the future of Faraday, these new lawsuits took place in a crisis.
In the past two months, Faraday has already dismissed hundreds of employees for unpaid leave. In early 2018, the electric car startup was still cash-rich, with the goal of launching its luxury electric SUV production by the end of the year.
But in July, it had already spent $800 million on the first phase of Evergrande's investment. Jia Yueting and the company asked Evergrande to advance another $700 million. Evergrande initially agreed to this request.
In return, the Chinese real estate giant asked Jia Yueting to leave the company, claiming that his debtor status in China has damaged Faraday's future branding and production of electric vehicles in China.
Faraday believes that Evergrande erroneously detained the funds after agreeing to advance the funds and filed a lawsuit in an arbitration court in Hong Kong.
The company also filed a lawsuit against Evergrande, saying it “deliberately” to let Faraday go bankrupt. A group of Faraday employees filed a similar lawsuit as a minority shareholder, claiming that Evergrande designed a “conspiracy” to destroy the startup.