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One of China’s most beleaguered entrepreneurs, Jia Yueting, has filed for Chapter 11 bankruptcy with a court in Delaware in a bid to clear himself of a $3.6 billion debt and to keep the wheels on Faraday Future, the electric car venture he founded in the U.S.

In the filing on Sunday, Jia offered his creditors the chance to take over his majority stake in the L.A.-based Faraday Future (FF) by transferring his equity in FF’s parent company, Smart King Ltd, to a creditor trust. In exchange, Jia’s 100 or so creditors—90% of which are in China—would agree to forgive the $3.6 billion worth of debt Jia owes.

However, that offer might not be so tempting to Jia’s hungry creditors as Jia warns his creditors will only recover their money if the company goes public. With investors souring on fellow Chinese electric vehicle (EV) startup Nio, the chances of Faraday Future—which recorded $477 million in losses last year—hosting a healthy IPO seem low.

In the driver’s seat

Jia Yueting founded Faraday Future in 2014 but his involvement with the company was only revealed in 2015 when the Associated Press found his name on a company letter sent to Nevada lawmakers. At the time, Faraday Future was lobbying to build a car factory in the desert, pledging to invest $1 billion and create 4,500 jobs.

The EV start-up, which was hyped as a rival to Tesla, quickly garnered media attention as the mysterious, Chinese-owned Faraday poached key players from rival EV firms, announced lavish spending plans and released a suitably futuristic concept car, which was soon likened to the Batmobile. The company has so far, however, failed to live up to its own hype.

In 2017 Faraday abandoned plans for a $1 billion Nevada factory, a year after breaking ground on the project, and has since sold the plot of land; a slew of top executives had abandoned the company months earlier as the company struggled with financing; and production of the company’s debut model—much more down to earth than the Batmobile concept car—is over a year behind schedule.

Despite its struggles, FF managed to attract an $800 million investment from Chinese real estate developer Evergrande at the start of 2018 but still ended the year with a loss of $477 million on its books. Faraday lost a further $103 million through to the end of July this year, bringing its total losses since inception to $2.15 billion.

A careening career

Once the 17th richest man in China, Jia’s winding road to bankruptcy arguably began in 2016 when the entrepreneur restructured his successful digital subscription service LeTV—dubbed “China’s Netflix”—into a tangled mess of business lines.

At its peak, LeTV’s sprawling ecosystem of products comprised TV and smartphone manufacturing, music and TV streaming, plus film production and auto making. The myriad business interests sat under a new parent company called LeEco, or “Happy Ecosystem.”

However, in his haste to develop a corporate empire, Jia plunged the company into debt, forcing the brash entrepreneur—once lauded as China’s Steve Jobs—to step down as CEO of LeEco’s listed unit, LeShi, in 2017. That same week, a Chinese court froze $175 million in assets held by Jia and LeShi and later placed Jia on a blacklist of debtors.

Jia, who had apparently already moved to the U.S., defied an order from China’s stock market regulator to return to China that year and pay off his debts. The runaway entrepreneur chose instead to stay in California and take over as CEO of Faraday Future.

Back to China

According to a statement on FF’s website, Jia’s restructuring scheme will help “further advance the implementation of FF’s US-China dual home market strategy.” If the plan is approved, Jia will stay on with the car company as founder and “Chief Product & User Officer”.

Significantly, the plan will clear Jia’s debts in China, potentially paving a way for the blacklisted debtor to return to the country as a spokesperson for the car company.

The embattled Faraday Future says it is still targeting the release of its FF91 model by September next year with hopes the brand’s inaugural car can take on both the U.S. and China markets.

An optimistic Carsten Breitfeld—the former BMW executive and co-founder of rival EV firm Byton who replaced Jia as CEO of Faraday in September—told Chinese media the group hopes to set up a production facility in China to produce the brand’s second model, the FF81.

Will China welcome Jia back?