Jia Yueting, the Chinese billionaire who left China two years ago after running up massive debts, has filed for bankruptcy and restructuring in the US, Yicai Global reported. Once the process is completed, he will no longer own a stake in Faraday Future, the new-energy vehicle startup he founded five years ago.

A trust controlled and managed by a committee and a trustee will be set up to ensure the rights and interests of creditors, the team in charge of Jia’s liabilities said in a statement on social media. The 46-year-old will transfer all of his personal assets, including his holding in California-based Faraday Future, relevant benefits and interests to creditors in this way.

More than 90% of Jia’s debt is guaranteed by his China businesses. So far he has repaid more than US$3 billion of a total US$3.6 billion. Less the frozen domestic assets yet to be disposed of and convertible shares of the guaranteed debt, the net liability is about US$2 billion, his Debt Project Team said in the statement.

Jia set up Leshi Internet Information and Technology in Beijing in 2004, building the firm into a diversified group with multiple businesses, including television dramas and movies, mobile phones and cars.

He was included in Hurun Report’s rich list in 2016 with a personal wealth of 42 billion yuan (US$5.9 billion). But in 2017, Leshi had a financial crisis. Jia then left China for the US to focus on Faraday Future.

Back home, he faces a series of debt lawsuits and litigations that remain unresolved, the report said.

Under the new plan, his creditors retain the right to dispose of all Chinese assets originally frozen by Jia and other direct debtors, and the original debtors and guarantors, with the exception of Jia, will continue to perform their debt repayment obligations.

Vacuum maker James Dyson on Oct. 10 pulled the plug on his own electric vehicle program before building a single vehicle. Credit: Farmers Weekly.

After completion Jia’s personal guarantee and debt obligations will be deemed to have been discharged. He can then return to China to promote and implement Faraday Future’s dual-home strategy, which will bring great impetus to the company’s fund-raising efforts and planned initial public offering, the statement said. It is also particularly significant for the rapid growth of the firm’s China business.

Jia will continue to assist the Faraday Future team in accomplishing previously set strategic goals as the startup’s founder and chief product and user officer, achieving the aim of maximizing the value of the firm’s equity investment and creditor trust assets, so as to pay off the debts through appreciation of all creditor trust assets.

Meanwhile, a number of analysts warn that Faraday could become the latest in a growing list of once-promising battery-car start-ups to short circuit, CNBC reported.

Vacuum maker Dyson on Oct. 10 pulled the plug on its own electric vehicle program before building a single vehicle. Founder James Dyson told employees in an e-mail he could “no longer see a way to make it commercially viable.”

Since the beginning of the decade, a partial list of EV failures also includes Bright Automotive, AMP, Aptera, Coda, Detroit Electric, Fisker Automotive and LeEco, the latter also founded by China’s Jia.

“Almost none of the battery-electric start-ups has had enough air under their wings to take off,” said Anton Wahlman, an analyst and electric vehicle consultant.

Dyson, best known for its bagless vacuum cleaners, bladeless fans and high-velocity hand dryers, had planned to invest US$2.7 billion to get its own EV program going, CBNC reported.

It had about 600 employees at the time the company’s founder announced the project’s termination, and it was preparing to set up a factory in Singapore to build a line of products expected to begin with a three-row crossover, according to patent documents that leaked out last May.

“This is a challenging time for our colleagues and I appreciate your understanding and sensitivity as we consult with those who are affected,” Dyson wrote his employees in an e-mail first revealed by tech website The Verge. “This is not a product failure, or a failure of the team, for whom this news will be hard to hear and digest. Their achievements have been immense – given the enormity and complexity of the project.”