Troubled electric car startup Faraday Future doesn’t own its intellectual property, according to a Thursday report from The Verge.
Faraday Future has been the topic of several news reports relating to the company’s financial issues and relationship with Chinese internet company LeEco, which is also building its own car. LeEco CEO Jia Yueting is a personal investor in Faraday Future.
The Verge reports that Faraday Future does not own its intellectual property, and that it is instead owned by a separate entity called FF Cayman Global.
Independently, a former employee who wished to remain anonymous told Business Insider that a few staff members left the company after learning Faraday Future didn’t own its intellectual property.
Faraday Future did not immediately return Business Insider’s request for comment.
“Some of the reasons some of us left was because we were afraid that all of the work that’s being done in the US, there is no proper corporate structure or legal entity structure,” the employee told Business Insider. “The feeling we had was that the IP [intellectual property] was not protected and if and when Faraday goes under, these guys would just pick up all the IP and all these other people in the US would be out of a job.”
The Verge further reports that FF Cayman Global, a separate entity from Faraday Future, is only responsible for managing Faraday Future’s intellectual property.
A source told the Verge that having an offshore entity may prevent suppliers from filing a claim against assets in the event of bankruptcy.
That concern could become relevant, considering Yueting told LeEco staff that the company was facing a shortage of cash from expanding too fast and in too many directions in early November.
Buzzfeed News reported in mid-December that a lawsuit was filed against Faraday Future from auto supplier Futuris for falling behind on $10 million worth of payments. The Verge is now reporting that Faraday Future has settled the lawsuit and needs to find a new seat supplier, which could take up to two years.
Another lawsuit, from by Beim Maple Properties, alleges Faraday Future is behind on roughly $105,000 in rent payments for a warehouse, per the Buzzfeed report.
Faraday Future has also stopped work on its $1 billion factory in North Las Vegas and is likely to miss the shipping deadline for its production vehicles that were said to come to market some time in 2017.
Faraday Future will show its production car at the Consumer Electronics Show in January.
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