Troubled Auto Supplier First Brands Puts Affiliates Into Bankruptcy
September 29, 2025
Source: The Wall Street Journal
The closely held company is also in talks with lenders on funding for a broader bankruptcy filing
First Brands Group, the auto-parts supplier that has faced market scrutiny over its financial disclosures and off-balance-sheet financing, has placed certain affiliates into bankruptcy.
Several corporate entities linked to First Brands filed chapter 11 petitions in Houston bankruptcy court on Thursday that were signed by First Brands owner Patrick James. The closely held company is also in talks with lenders holding pieces of its $6 billion debt stack about providing a debtor-in-possession loan to fund its main operations through a bankruptcy filing that could come within days, according to people familiar with the matter.
Last month, First Brands paused an effort to refinance debt with investment bank Jefferies after lenders asked the company behind products such as Fram oil filters and Anco windshield wipers to procure a quality-of-earnings report for more details about its revenue and factoring agreements, a type of supply-chain financing.
Investors also became skittish as they learned that Apollo Global Management, the asset-management giant, had bet against First Brands by purchasing credit-default swaps on the company’s debt. First Brands’ loans cratered in value in recent weeks, marking one of several troublesome developments for the strained automotive industry.
Most of the company’s lenders are represented by Gibson Dunn & Crutcher. A smaller group of lenders has organized with Glenn Agre Bergman & Fuentes in an attempt to participate in the bankruptcy loan being negotiated with the larger lender group, according to people familiar.
The DIP loan is expected to give participating lenders superior claims on the company’s assets over holders that are excluded, the people also said.
The company’s top-ranking and second-lien loans are bid at 39.5 cents and 4 cents on the dollar of full face value on Thursday, according to a loan trader.
Write to Soma Biswas at soma.biswas@wsj.com and Alexander Gladstone at alexander.gladstone@wsj.com
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