Application to Chapter 11 was submitted by First Brands Group to USA located on the rim of her bankruptcyrevealing that its total obligations are estimated to move between $ 10 and $ 50 billion, with $ 1 to 10 billion assets.
The application was filed in the southern district of Texas in the US and marks one of the most noisy bankruptcies that had raised billions of dollars from private debt markets.
The bankruptcy file states that a special committee will be set up to investigate off -balance sheet arrangements, which were linked to invoices and stocks. The company had informed its creditors that in March the long -term debt was $ 5.9 billion, compared to nearly $ 1 billion in availableBut in the meantime the concerns have been multiplied by additional, opaque obligations. The situation deteriorated when a cooperation bank recently seized part of its funds.
To continue the activities during the restructuring process, First Brands secured $ 1.1 billion funding by a team of creditors. At the same time, Charles Moore of Alvarez & Marsal was headed by a restructuring, with a mandate to lead the company to a debt resolution and reduction plan.
The shock to buy debt was immediate. Within days, Company’s higher gradient loans were found to change hands about a third of the nominal valuewhile lower priority securities were invoiced in “one cents on the dollar”. The case is added to the recent collapse of Tricolor, fueling fears of significant losses in big names on Wall Street and the wider impact on corporate debt markets.
FIRST BRANDS, based in Ohio, had expanded in the last decade by a specialized industrial company to a multinational group through successive acquisitions with high leverage. It has factories in several US states, and has an international presence in Romania, Mexico and Taiwan. Subsidiaries outside the US were not included in the bankruptcy application.
In the creditors’ side, the application records specialized investors with exposure to FIRST BRANDS Factoring, including a large investment bank assets management unit. The range and the way these agreements were structured are now a central object of the research, as they attribute much to the acceleration of the liquidity crisis.
The escalation of the case also causes turbulence in the spare parts industry, which is already being tested by tariff policies and dependence on overseas production. The outcome of the restructuring will judge not only the fate of the group but also the amount of the final losses for its financiers, with the market foreshadowing that the “haircut” in part of the debt is difficult to avoid.