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Fraud-Hit First Brands Liquidates, Pursues Creditor Claims
17 Apr
Summary
- First Brands will place at least $25 million into a trust.
- The trust will pursue claims against former managers and lenders.
- Company allegedly collapsed due to massive fraud.
Auto-parts maker First Brands Group is concluding its bankruptcy proceedings by liquidating remaining operations. The company, allegedly crippled by extensive fraud, will establish a trust with at least $25 million to pursue legal claims on behalf of its creditors.
This trust will target former top managers and a significant lender, as First Brands has already initiated two lawsuits. The company previously shuttered 17 facilities and terminated 4,000 employees earlier this year, having determined that reorganization was not feasible without sufficient lender support.
First Brands has secured court approval to hire a liquidation consultant. This consultant will manage the sale of any remaining inventory and work to collect outstanding payments from customers who have withheld them since the bankruptcy filing last year.
