Businessman, Faraday Future founder, Jia Yueting Photo: IC

Heavily indebted businessman Jia Yueting, founder of Leshi Internet Formation and Technology Corp (LeTV) and Faraday Future (FF), announced on Thursday that a personal bankruptcy reorganization process he applied for in the US was completed on June 26, and the reorganization plan has come into effect.

"For all my creditors, as FF shareholders, we will share the future success of FF. And LeTV shareholders can also meet certain conditions from the creditors of the trust to obtain a fixed-share compensation," Jia said in a statement posted on his account on Weibo, China's Twitter-like social media platform.

Jia said the creditor trust has been formally established and has started to operate.

After running up huge debts, Jia fled to the US in 2017 to escape legal punishment in China.

The Beijing Regulatory Bureau of the China Securities Regulatory Commission issued a notice in December 2017, ordering Jia to return to China by the year's end to fulfill the obligations of the company's controller, and protect the legitimate rights and interests of LeTV investors.

LeTV creditors have also repeatedly traveled to the US for debt collection purposes.

A California court issued documents in December 2018, temporarily freezing Jia's stake in California-based FF, his new-energy vehicle project, and issuing a protection order for the luxury house he owns in California.

However, the debt issue remains unresolved.

According to bankruptcy filings released by the court, Jia has personal assets of more than $500 million, debts of more than $1 billion and more than 100 creditors. His largest creditor is Yingda Capital Management, holding $279 million of his debts, according to a report from financial media jrj.com in October 2019.

"There is no getting around the fact that I was first responsible for the overnight collapse of the LeTV system," Jia said in his latest statement.

After receiving approval from his personal creditor committee, Jia reserved no more than 10 percent in the creditor trust, which is mainly used for contingent compensation for LeTV shareholders, which can be distributed after relevant legal procedures are fulfilled, the statement said.

"I will also arrange a special team to coordinate the compensation of LeTV shareholders," he said.

Jia no longer owns any equity in FF as the FF partnership and his personal bankruptcy restructuring have taken effect. But his roles as FF founder, partner and chief product and user ecosystem officer remain unchanged.

Jia also revealed that FF's IPO plan made at the beginning of 2019 is in full swing, and they are planning to soon complete the IPO.