San Francisco, CA – October 17, 2025 — The U.S. Trustee, part of the Department of Justice, today filed a motion urging the bankruptcy court to appoint an independent examiner to scrutinize the recent collapse and financial practices of auto parts manufacturer First Brands Group. The request comes amid serious allegations of fraudulent conduct and missing funds, and follows First Brands’ Chapter 11 filing in September.
Reasons for the Call
- The Trustee’s motion cites “ample grounds” to suspect that executive leadership or board members may have been involved in misconduct, dishonesty, or criminal behavior in managing the company’s affairs.
- One creditor, Raistone, claims as much as USD 2.3 billion “simply vanished” from First Brands’ books—raising red flags over off-balance sheet financing and complex trade-factoring arrangements.
- While First Brands has already established a special board committee to investigate internal irregularities, the Trustee argues that only an independent examiner can deliver credible, unbiased findings, particularly when insiders may be implicated.
Financial & Structural Context
- First Brands reported total liabilities of USD 11.6 billion at the time of bankruptcy filing.
- Its collapse has cast a spotlight on risks in private credit and trade financing markets, especially where opaque accounting and off-balance sheet exposure are involved.
- Major financial institutions—such as Jefferies and UBS—are among the creditors exposed to First Brands’ debt, intensifying scrutiny of their due diligence practices.
Next Steps & Hearing Dates
- Bankruptcy Judge Chris Lopez has scheduled a hearing for November 17 on prior examiner requests. However, the U.S. Trustee is pressing for a ruling by October 29 to expedite transparency.
- The independent examiner, if appointed, would have authority to issue a public report on findings—unlike internal committees, whose findings may not be fully public.
Statement from Ixoraly
“As corporations everywhere adopt increasingly complex financing and accounting strategies, transparency is no longer optional—it is essential,” said an Ixoraly spokesperson. “The First Brands case highlights the risk that even large, established firms can spiral under opaque practices. We join the call for independent oversight and thorough inquiry—so that investors, creditors, and markets can restore trust in the system.”
Ixoraly will continue tracking developments in this case and provide in-depth analysis of the implications for global credit markets, bankruptcy law, and corporate governance.
