FRAM Target oil filter quality should strive to equal the OG Ultra !
First Brands (Fram) bankruptcy
- Thread starter Alien
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- Sep 6, 2021
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And the hits just keep on coming…..
First Brands Group, the automotive supplier that collapsed into bankruptcy last month after the discovery of accounting irregularities, is facing a criminal investigation by the Justice Department, people familiar with the matter said.
Newly appointed independent directors at First Brands have said in court papers they discovered an unpaid balance of $2.3 billion and are looking into whether the company had been double-pledging its trade receivables to third-party investors. One of those trade finance firms on Wednesday sought the appointment of an examiner in bankruptcy court to trace how billions of dollars of assets had “simply vanished.”
The Justice Department is also examining the closely held company and the complex financial arrangements it used to accumulate billions of dollars of off-balance-sheet debt, the people familiar with the matter said.
The supplier of oil filters and windshield wipers has some $6 billion in balance-sheet debt in addition to its off-balance-sheet financing, primarily from factoring, a form of short-term borrowing backed by its customers’ unpaid invoices. The bankruptcy has amplified concerns that corporate credit markets have gotten too frothy and don’t adequately reflect risks to borrowers.
First Brands Group, the automotive supplier that collapsed into bankruptcy last month after the discovery of accounting irregularities, is facing a criminal investigation by the Justice Department, people familiar with the matter said.
Newly appointed independent directors at First Brands have said in court papers they discovered an unpaid balance of $2.3 billion and are looking into whether the company had been double-pledging its trade receivables to third-party investors. One of those trade finance firms on Wednesday sought the appointment of an examiner in bankruptcy court to trace how billions of dollars of assets had “simply vanished.”
The Justice Department is also examining the closely held company and the complex financial arrangements it used to accumulate billions of dollars of off-balance-sheet debt, the people familiar with the matter said.
The supplier of oil filters and windshield wipers has some $6 billion in balance-sheet debt in addition to its off-balance-sheet financing, primarily from factoring, a form of short-term borrowing backed by its customers’ unpaid invoices. The bankruptcy has amplified concerns that corporate credit markets have gotten too frothy and don’t adequately reflect risks to borrowers.
and folks.. that RIGHT there is the definition of "Cooking the books" as someone earlier asked in this thread.
I'm not surprised but encouraged that someone IS looking into this type of behavior, as others said it was "Normal Business".. maybe not after all. It's about time that these private equity people who are basically the character Gordon Gecko in the movie Wall Street (played by Micheal Douglas). Where Gecko said "greed is good, greed is right".. It's about time these real life Geckos face what they've done by ruining others businesses just so they can make a profit. I have nothing wrong with capitalism but sometimes it just goes too far.
I also have to add that I remembered when Gecko's character was asked why he wanted to destroy a company he replied "Because it's wreckable".. wow .. that sort of sums it all up.
Not just First Brands. Tricolor was similar. Apparently they sold the same loans more than once.
Lots of Wall Street discussions these likely not the only ones. Also - it’s private credit — but private credit also borrow from the big banks. NDFI’s. Just hoping it’s not another taxpayer bailout in the making.
Lots of Wall Street discussions these likely not the only ones. Also - it’s private credit — but private credit also borrow from the big banks. NDFI’s. Just hoping it’s not another taxpayer bailout in the making.
As I recall, one of the big factoring lenders went bankrupt at the early stages of the 2009 Great Financial Crisis. So maybe this is a repeat performance?
I always wondered that if a company needs to factor their receivables to obtain necessary working capital, are they really a going concern? But the lenders think they are safe due to the collateral. Maybe not ...
Over $2B in missing collateral and no money in the bank. And now a criminal DOJ probe. Pretty bad ...
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I've been looking at it from the publicly traded BDC angle, as in how much direct exposure my investments might have. I alluded to this in a couple other threads over the last week. (AI and Investor blog)
This seems about the most accurate summary:
"Unfortunately, BDC exposure is extensive but not necessarily from the players one might have expected. Going by Advantage Data’s records – as of the IIQ 2025 – total exposure at cost – both in first and second lien debt – amounted to $224mn. There were 14 BDCs involved including many non-traded players and 4 public BDCs: Prospect Capital (PSEC); Palmer Square (PSBD); Great Elm (GECC) and PhenixFin (PFX)."
https://bdcreporter.com/2025/09/multiple-bdcs-exposure-to-bankrupt-first-brands-corp/
Years ago I held PSEC and PSBD, but thank goodness not now. I have asked my larger BDCs if they had any exposure to First Brands. I received solid "NO" "none" and rather quick responses. Nice. People must be asking. Good!
Smarter BDC's saw through the fecal mist of First Brands. Those clowns should be in jail.
This seems about the most accurate summary:
"Unfortunately, BDC exposure is extensive but not necessarily from the players one might have expected. Going by Advantage Data’s records – as of the IIQ 2025 – total exposure at cost – both in first and second lien debt – amounted to $224mn. There were 14 BDCs involved including many non-traded players and 4 public BDCs: Prospect Capital (PSEC); Palmer Square (PSBD); Great Elm (GECC) and PhenixFin (PFX)."
https://bdcreporter.com/2025/09/multiple-bdcs-exposure-to-bankrupt-first-brands-corp/
Years ago I held PSEC and PSBD, but thank goodness not now. I have asked my larger BDCs if they had any exposure to First Brands. I received solid "NO" "none" and rather quick responses. Nice. People must be asking. Good!
Smarter BDC's saw through the fecal mist of First Brands. Those clowns should be in jail.
Update. I put the new wipers on my Camry. Still dont know the brand but I am very happy. Easiest install ive ever had with the flip lid and close design ill call it. Then wipe good too!
I don’t want to divert this thread into forbidden territory, this is just an attempt at a suggestion: Let’s stop calling this Capitalism. Because it isn’t. Raping a company that was built successfully on Capitalism is the antithesis of Capitalism.
Capitalism in and of itself is not a morality stalwart. Being bad at capitalism does not necessarily make it not capitalism.
Yup. Bad people will take advantage of any system.
James is a 1st order predatory crook. I cannot cite laws he may or may not have broken, but who would ever be foolish enough to lend him a dime?
Some fund raises hand and says: "I have a bunch of 'investors' who want 15%"
Exactly, and was part of the context of my post 88. In today's chaotic economy, includes more and more of the world wide factor, companies are going to cut corners and may even cheapen the quality (and size) of products to stay in the black. It's part of doing business in a capitalist economy.
Being bad at capitalism is still capitalism, which is defined as:
"A n economic system in which a country's trade and industry are controlled by private owners for profit."
First Brands is controlled by private owners, and being in the situation they are in, I'd say bad at running a capitalistic business. This can happen to any company if it's not ran well.
Not disagreeing but the problem starts with people trying to replace said system because bad actors in the system
Many companies get run into the ground and damaged or even fail because of how it's ran by " bad actors". A few people at the top with authority calling the moves can make or break any company. We've seen this many times in history.
And sadly these people are not always held accountable- in a very bad way- they do the same junk to another company!
Yeah, people never learn, or forget way too easily. Guys that run big companies into the ground need to be held accountable somehow.
Sorry, but First Brands is "missing" $2.3 Billion dollars. Not "trying to survive capitalism" or wasted it on some endevour, or spent it on something they shouldn't have, or paid our CEO too much. Its literally just vanished. https://www.reuters.com/world/us/fi...llion-simply-vanished-seeks-probe-2025-10-09/
ie someone likely stole it.
The First Brands issue is fraud, plain and simple. There is no reason to compare it to any other system. Fraud is just fraud.
ie someone likely stole it.
The First Brands issue is fraud, plain and simple. There is no reason to compare it to any other system. Fraud is just fraud.
Someone trying to be really "capitalistic" in a different way. But First Brands was obviously cutting corners when it took over Fram and Champion Labs in terms of the oil filters they were producing under First Brands. That was obviously capitalistic company moves, but obviously not the main cause of FB's failure. Doing cost cutting and product quality cheapening across all of the products they handle could add up in a pretty negative way. It could have been a part if the consumer saw that happening and they lost sales because of it.
There is nothing specifically "capitalistic" about lowering quality. It happens in every system.
Compare camera's built in the USSR using equipment and plans they took from East Germany post WW2, to the ones made by West Germany using the same design. The German ones were better and continued to improve, while the Russian variants were comparatively garbage. There are many other post WW2 examples, nuclear reactors being the ultimate failure which helped lead to the downfall of the USSR.
Now compare the PG filters made in China (decidedly not capitalism) to the stuff currently being made by First Brands and M&H. The CCP made stuff is superior.
The only and proper definition of capitalism is that the market allows participants to make decisions on their own - without outside interference. First Brands chose to make lousy filters, while the Chinese chose (were told?) not to. Capitalism had little to do with either choice.
