{{Short description|American auto parts company}} {{Use mdy dates|date= October 2025}} {{Use American English|date= October 2025}} {{Infobox company | name = First Brands Group | logo = <!-- e.g. First Brands Group logo.svg --> | type = Private | industry = Automotive aftermarket | predecessor = Crowne Group | founded = {{start date and age|2013|df=yes}} <!-- founded in 2013 --> | founder = Patrick James | hq_location_city = Cleveland, Ohio | hq_location_country = United States | area_served = Worldwide | key_people = Charles Moore (CEO) | products = Wiper blades<br />Spark plugs<br />Brake components<br />Oil filters | brands = Trico<br />FRAM<br />Raybestos<br />Autolite | owner = Patrick James | website = {{URL|firstbrandsgroup.com}} }} '''First Brands Group''' is an American auto parts company based in Cleveland, Ohio. It owns brands such as Trico, FRAM, Raybestos, and Autolite. First Brands Group generated revenues of more than $5 billion in 2024 from manufacturing and distributing automotive products, primarily into aftermarket retail channels.<ref>{{Cite web|url= https://www.spglobal.com/ratings/en/regulatory/article/-/view/sourceId/101626416|title= Research Update: First Brands Group LLC 'B+' Rating Affirmed On Improved Business Risk|date=May 30, 2025|access-date=January 2, 2026|website=S&P Global|language=en}}</ref>
First Brands was founded by an Indian-American businessman Patrick James who is also the owner of the company.
==History== ===2013–2025: Early years, acquisitions, and growth=== First Brands Group was founded in 2013 in Ohio by James as Crowne Group, and was rebranded as First Brands Group in 2020.<ref>{{Cite web |date=2025-10-06 |title=Case Summary: First Brands Group Chapter 11 |url=https://bondoro.com/first-brands-group/ |access-date=2025-10-12 |website=Bondoro |language=en}}</ref><ref name="Guardian">{{Cite news |last=Helmore |first=Edward |date=2025-10-10 |title=First Brands: why a maker of spark plugs and wiper blades has Wall Street worried |url=https://www.theguardian.com/business/2025/oct/10/first-brands-wall-street |access-date=2025-10-12 |work=The Guardian |language=en-GB |issn=0261-3077}}</ref> James bought Trico, a manufacturer of windshield wipers and, using debt, acquired numerous auto parts manufacturers, some 24 in total according to the company website.<ref name="Guardian" /> In August 2020, they acquired brakes manufacturer Raybestos. They own filters maker FRAM, and the Autolite brand of spark plugs and ignition wire sets.
===2025–present: Bankruptcy, Federal Indictment=== In September 2025, First Brands filed for Chapter 11 bankruptcy protection in Texas, after substantial losses in revenue, and due to creditor concern over liabilities of $10–50 billion against assets of $1–10 billion, funded by "opaque off-balance sheet financing".<ref name="Guardian" /><ref>{{Cite web|url= https://www.ft.com/content/095a60a4-9bde-4f40-bb20-95c02c95727b |title= First Brands files for bankruptcy, threatening multibillion-dollar losses|first1=Robert|last1=Smith|first2=Ortenca|last2=Allaj|first3=Amelia|last3=Pollard|first4=Eric|last4=Platt|date=September 29, 2025|access-date=2025-10-12|website=Financial Times|language=en}}</ref>
On October 8, 2025, UBS announced that they would be investigating First Brands' bankruptcy case. UBS claimed that they had exposure of more than $500 million from First Brands' bankruptcy through agreements towards supply chain financing.<ref>{{Cite web|url= https://www.reuters.com/business/finance/ubs-examines-hit-funds-500-million-first-brands-exposure-2025-10-08/|title= UBS examines hit to funds from $500 million First Brands exposure|date=October 8, 2025|access-date=October 13, 2025|website=Reuters|language=en}}</ref> That same day, Katsumi Global claimed that First Brands owed them $1.7 billion.<ref>{{Cite web|url= https://www.gtreview.com/news/americas/katsumi-owed-over-us1-7bn-from-first-brands-bankruptcy/|title=Katsumi owed over US$1.7bn from First Brands bankruptcy|first=John|last=Basquill|date=October 9, 2025|access-date=October 13, 2025|website=GT Review|language=en}}</ref> Jefferies Group also ended up being exposed to First Brands' bankruptcy case, claiming that Leucadia Asset Management, a fund managed by the company, held $715 million in receivables linked to First Brands. Jefferies also accused First Brands of failing to make payments from obligators of Point Bonita Capital, managed by Leucadia. Analysts at Morgan Stanley predicted that Jefferies is expected to lose over $40 million as a result of the bankruptcy case.<ref>{{Cite web|url= https://www.reuters.com/business/finance/jefferies-discloses-715-million-fund-exposure-first-brands-bankruptcy-2025-10-08/|title= Jefferies discloses fund exposure to bankrupt First Brands, shares fall|first=Mayna|last=Saini|date=October 8, 2025|access-date=October 13, 2025|website=Reuters|language=en}}</ref>
On October 9, it was reported that First Brands would be facing a federal criminal investigation by the United States Department of Justice after discovering over $2.3 billion went missing. They accused the company of "double-pledging its trade receivables to third-party investors."<ref>{{Cite web|url= https://www.wsj.com/articles/first-brands-creditor-raistone-seeks-probe-into-vanished-2-3-billion-5ae03547?gaa_at=eafs&gaa_n=ASWzDAgBy4uhof5X-ez2lHwsdyCAh8Ww9pALAM7_cBYynhqqChOrUrvgjbpPtRj9ew%3D%3D&gaa_ts=68ed0713&gaa_sig=fiTX7eBAbviV8tUJwxnCoMkj9zoHKiGoLcEtBW7Q-lMAU8SjS25DyRc0BFTqgDRHit7s8TdpWzSRC4BSamP6Mw%3D%3D|title= Bankrupt Auto Supplier First Brands Faces Criminal Investigation|first1=Alexander|last1=Gladstone|first2=Alicia|last2=McElhaney|date=October 9, 2025|access-date=October 13, 2025|website=The Wall Street Journal|language=en}}</ref> Raistone, a creditor of First Brands, claimed that the $2.3 billion "vanished" from the company.<ref>{{Cite web|url= https://www.reuters.com/world/us/first-brands-creditor-says-23-billion-simply-vanished-seeks-probe-2025-10-09/|title= First Brands' creditor says $2.3 billion 'simply vanished', seeks probe|first=Shivani|last=Tanna|date=October 9, 2025|access-date=October 13, 2025|website=Reuters|language=en}}</ref> Later that day, a joint venture between Norinchukin Bank and Mitsui & Co. claimed that $1.75 billion was exposed to First Brands, stating that they extended trade financing to the company.<ref>{{Cite web|url= https://www.bloomberg.com/news/articles/2025-10-09/first-brands-exposure-of-1-75-billion-hits-norinchukin-venture?embedded-checkout=true|title= First Brands Exposure of $1.75 Billion Hits Norinchukin JV|first1=Irene|last1=Garcia Perez|first2=Jonathan|last2=Randles|first3=Taiga|last3=Uranaka|first4=Yusuke|last4=Maekawa|date=October 9, 2025|access-date=October 13, 2025|website=Bloomberg|language=en}}</ref>
On October 10, Patrick James announced that he would be discussing the possibility of stepping down as CEO of the company.<ref>{{Cite web|url= https://www.bloomberg.com/news/articles/2025-10-11/first-brands-elusive-ceo-weighs-stepping-down-as-fallout-builds?embedded-checkout=true|title= First Brands’ Elusive CEO Weighs Stepping Down as Pain Grows|first=Reshmi|last=Basu|date=October 10, 2025|access-date=October 13, 2025|website=Bloomberg|language=en}}</ref> On October 12, 2025, Jefferies claimed that they would see limited impact from the bankruptcy of First Brands and that any potential losses would easily be manageable following a significant share loss in its stock.<ref>{{Cite web|url= https://www.reuters.com/business/autos-transportation/jefferies-sees-limited-impact-first-brands-bankruptcy-2025-10-13/|title= Jefferies expects limited fallout from First Brands' bankruptcy|date=October 12, 2025|access-date=October 13, 2025|website=Reuters|language=en}}</ref> On October 13, 2025, James resigned as CEO and announced that Charles Moore, CFO of the company, would replace him as CEO. James also announced that his brother, Edward James, would be resigning from his senior position with the company.<ref>{{Cite web|url= https://www.reuters.com/sustainability/boards-policy-regulation/first-brands-ceo-patrick-james-resigns-2025-10-13/ |title=First Brands CEO James resigns amid bankruptcy process; turnaround expert in charge|date=October 13, 2025|access-date=October 13, 2025|website=Reuters|language=en}}</ref>
On October 13, Morningstar DBRS published a research note discussing the credit implications of First Brands' bankruptcy for trade credit insurers and reinsurers. According to the credit rating agency, "the collapse of First Brands is likely to become a real-world stress test for the trade credit ecosystem at the intersection of insured receivables and private credit."<ref>{{Cite web |title=First Brands' Bankruptcy Tests Coverage Boundaries in Trade Credit Insurance |url=https://dbrs.morningstar.com/research/464750/first-brands-bankruptcy-tests-coverage-boundaries-in-trade-credit-insurance |access-date=October 15, 2025 |website=Morningstar DBRS}}</ref> Morningstar DBRS' initial base case for total insured losses linked to First Brands' receivables program is in the range of $300–600 million, which Morningstar DBRS believes should remain manageable for the sector (i.e., an earnings event with no capital strain). In its adverse scenario, Morningstar DBRS "anticipate[s] broader claims recognition, reserve strengthening, and total losses potentially exceeding $1 billion across trade credit insurers and reinsurers." For the broader TCI market, Morningstar DBRS "expect[s] a general repricing of receivables associated with highly leveraged insureds and complex supply chain finance structures." More recently, Morningstar DBRS stated that "insurers' decisions to maintain near-record exposure levels therefore signals confidence in risk selection and reinsurance protection. Still, it also heightens the potential for loss volatility should a global trade contraction or major bankruptcy trigger correlated claims."<ref>{{Cite web |title=When Trade Flows Falter: How Procyclicality Affects Trade Credit Insurance During Economic Downturns. |url=https://dbrs.morningstar.com/research/467743/when-trade-flows-falter-how-procyclicality-affects-trade-credit-insurance-during-economic-downturns |access-date=November 25, 2025 |website=Morningstar DBRS}}</ref>
On January 26, 2026, First Brands announced that it would be winding down its Autolite, Brake Parts, Inc., and Cardone subsidiaries after being unable to secure funding and complete a sale for the three companies.<ref>{{Cite web|url= https://www.businesswire.com/news/home/20260126446855/en/First-Brands-Group-Commences-Wind-Down-of-North-American-Brake-Parts-Inc.-Cardone-and-Autolite-Business-Units|title= First Brands Group Commences Wind Down of North American Brake Parts Inc., Cardone, and Autolite Business Units|date=2026-01-26|access-date=2026-01-29|website=Business Wire|language=en}}</ref>
On January 29, former CEO Patrick James and his brother Edward James, were indicted on federal fraud charges. Both are accused of intentionally bankrupting the company and fraudulently obtaining billions of dollars without notice from lenders and financing partners by inflating invoices for accounts receivable and payable, falsifying financial payments and hiding substantial liabilities from lenders.<ref>{{Cite web|url= https://www.cbsnews.com/amp/news/patrick-james-first-brands-indictment-fraud/|title= First Brands founder Patrick James and brother Edward indicted on fraud charges|first=Mary|last=Cunningham|date=2026-01-29|access-date=2026-01-29|website=CBS News|language=en}}</ref>
==Role of non-bank lenders== One early provider of financing was Greensill Capital, which from 2015 extended tens of millions of dollars of funding linked to invoices issued by Crowne Group, a holding company controlled by James.<ref name="auto">{{Cite web|url=https://www.ft.com/content/83734e55-f3a6-46b6-865e-f16667d2fd3b|title=The secretive First Brands founder, his $12bn debt and the future of private credit |first1=Robert |last1=Smith |first2=Ortenca |last2=Aliaj |first3=Eric |last3=Platt |website=Financial Times}}</ref> Greensill later collapsed in 2021 amid its own scandal, prompting scrutiny of supply-chain finance generally.<ref name="auto"/> Even after that failure, James raised additional billions of dollars, largely from private credit firms that marketed such "asset-backed" lending as comparatively low risk.<ref name="auto"/>
Supply chain and invoice lenders often dealt primarily with James’s older brother, Ed James, who served as First Brands’ key contact for "working capital solutions".<ref name="auto"/> The group’s funding structures connected it to several major financial institutions. UBS’s Chicago-based hedge fund unit O’Connor acquired a stake in Raistone, a technology platform that facilitated supply-chain finance for First Brands, and also purchased First Brands-linked invoices directly, as did a joint venture between Mitsui & Co. of Japan and Norinchukin Bank.<ref name="auto"/>
Jefferies was also involved through Point Bonita Capital, a private credit fund focused on invoice finance that told investors it conducted detailed research and credit analysis.<ref name="auto"/> Onset Financial, a Utah-based lender, later said it had amassed about $1.9 billion of exposure to First Brands’ inventory-backed debt by the time of the company’s bankruptcy. In a public case study apparently referring to First Brands, Onset acknowledged that it had provided funding even though a recent reorganisation made it difficult to obtain a clear financial picture.
Regulatory filings indicated that lenders often earned double-digit yields on First Brands’ off-balance-sheet invoice and inventory facilities.<ref name="auto"/> Some investors in funds that participated in these structures later said they were unaware of the extent of their exposure to James’s companies.<ref name="auto"/> Firms such as UBS O’Connor and Point Bonita argued that the credit risk was tied primarily to large corporate customers named on invoices, including Walmart. After the bankruptcy, however, Raistone and Point Bonita disclosed that payments had been routed to them through First Brands rather than directly from the customers.<ref name="auto"/>
Several asset-backed finance specialists have stated that they declined to transact with First Brands, or reduced existing credit lines, when the company failed to provide requested documentation or explanations. Some potential lenders reported that they received unsatisfactory answers when querying its financial statements and observed that its reported margins significantly exceeded those of comparable peers.<ref name="auto"/> One lender recalled that when he explained to Ed James that his team would need to inspect warehouse inventory against stock records for a proposed deal, he was told: "We don’t let lenders into the warehouse."<ref name="auto"/>
==Corporate structure and leadership== By the 2020s, James controlled an international auto-parts conglomerate with an enterprise value in the billions of dollars. He rebranded his holdings as First Brands Group and recruited senior executives with extensive connections to leading Wall Street lenders.<ref name="auto"/>
In 2021 Michael Baker, a Canadian lawyer who had spent the previous decade as a partner at the law firm Paul Hastings and was regarded as one of the United States' most prominent corporate debt attorneys, joined First Brands as chief corporate strategy officer.<ref name="auto"/> Baker also became a trustee of the Sandor Foundation, a non-profit organisation created by James and his wife Elizabeth in 2005. The foundation has focused its giving primarily on Catholic-affiliated institutions.<ref name="auto"/>
==References== {{Reflist}}
Category:Companies that filed for Chapter 11 bankruptcy in 2025 Category:Automotive companies established in 2013 Category:American companies established in 2013 Category:Companies based in Cleveland Category:Privately held companies based in Ohio