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Entities tied to First Brands Group and its founder Patrick James have filed for bankruptcy protection in the US, compounding issues at the car parts supplier whose troubles have roiled credit markets.
Carnaby Capital Holdings and several entities that raised debt linked to First Brands Group filed for Chapter 11 proceedings on Wednesday, raising the likelihood that the business is itself on the brink of bankruptcy.
First Brands Group is estimated to have raised as much as $10bn in debt and off-balance sheet financing.
James, a Malaysian-born businessman who has faced fraud accusations in prior lawsuits filed by creditors and later dismissed, signed Carnaby’s bankruptcy petition as its president and chief executive.
Investment fund filings seen by the Financial Times describe debt issued by Carnaby Inventory III — one of the entities included in Wednesday’s bankruptcy filing — as a “First Brands Revolving Loan Facility”.
Filings also show that Carnaby previously issued debt at high interest rates, with one fund listing the coupon on a previous loan as more than 13 percentage points above a floating-rate benchmark.
First Brands did not immediately respond to a request for comment.
This is a developing story
