RusBankrot
We know everything about bankruptcy
05/12/2025
Friday
THIS DAY IN HISTORY:
5 December 
1936 The Stalinist Constitution of the USSR was adopted.
1936 the Stalinist constitution of the USSR was adopted.
1484 Pope Innocent VII initiated the "witch hunt".
1456 An earthquake that destroyed Naples occurred - 35 thousand people died.
1456 occurred an earthquake that destroyed Naples - 35 thousand people died.
5 December
1936 The Stalinist Constitution of the USSR was adopted.
1936 the Stalinist constitution of the USSR was adopted.
1484 Pope Innocent VII initiated the "witch hunt".
1456 An earthquake that destroyed Naples occurred - 35 thousand people died.
1456 occurred an earthquake that destroyed Naples - 35 thousand people died.
FIRST BRANDS PARTS SUPPLIER ACCUSED OF "MASSIVE FRAUD"
The key event of the week will be the bankruptcy hearing of auto parts manufacturer First Brands. A group of creditors has filed a class action lawsuit accusing the company's management of carrying out a major fraudulent scheme. The plaintiffs insist that before the official declaration of insolvency in September, management committed a number of serious violations.
One of the most controversial issues that caused sharp disagreement was the decision of the board of directors to provide preferential terms for repayment of $3 billion in debt to a narrow group of 80 creditors. This deal was concluded in exchange for a new loan of $1.1 billion needed to finance the bankruptcy procedure itself. According to the other participants in the process, such actions deprive them of equal rights and directly violate the established rules.
The statement of claim also contains information about a possible double pledge of the company's property and intentional misrepresentation of information provided in financial statements, loan agreements and other documents. Creditors believe that the real state of affairs in the company was deliberately hidden. The demands of the affected parties include the appointment of an external manager for one of the subsidiaries of First Brands and the conduct of an independent financial review, especially in light of the allegations of the loss of billions of dollars.
Evolution Credit Partners, one of the major creditors, insists that the agreement on priority payments jeopardizes the interests of others and may deprive them of the opportunity to receive compensation. In their response, representatives of First Brands rejected all the accusations, stating full compliance with the law.
The company's founder, Patrick James, resigned as CEO in early October, shortly after filing for bankruptcy on September 29. The U.S. Federal Prosecutor's Office is investigating the circumstances of the case.
Photo: Freepik
One of the most controversial issues that caused sharp disagreement was the decision of the board of directors to provide preferential terms for repayment of $3 billion in debt to a narrow group of 80 creditors. This deal was concluded in exchange for a new loan of $1.1 billion needed to finance the bankruptcy procedure itself. According to the other participants in the process, such actions deprive them of equal rights and directly violate the established rules.
The statement of claim also contains information about a possible double pledge of the company's property and intentional misrepresentation of information provided in financial statements, loan agreements and other documents. Creditors believe that the real state of affairs in the company was deliberately hidden. The demands of the affected parties include the appointment of an external manager for one of the subsidiaries of First Brands and the conduct of an independent financial review, especially in light of the allegations of the loss of billions of dollars.
Evolution Credit Partners, one of the major creditors, insists that the agreement on priority payments jeopardizes the interests of others and may deprive them of the opportunity to receive compensation. In their response, representatives of First Brands rejected all the accusations, stating full compliance with the law.
The company's founder, Patrick James, resigned as CEO in early October, shortly after filing for bankruptcy on September 29. The U.S. Federal Prosecutor's Office is investigating the circumstances of the case.
Photo: Freepik
05.11.2025
