Bankrupt Auto Parts Maker Sues Ex-CEO Over Alleged Multi-Billion Dollar Fraud

Bankrupt auto parts manufacturer First Brands has launched a lawsuit against its former CEO and founder, Patrick James, accusing him of orchestrating multiple frauds that bankrupted the company. According to the lawsuit, James allegedly misappropriated hundreds of millions of dollars from First Brands.

Neither James' lawyer nor his representative responded to requests for comment. First Brands' bankruptcy has brought concerns about opaque practices in the private credit market to the forefront, while spotlighting the exposure risks faced by prominent financial institutions.

The Ohio-based manufacturer, which specializes in filters, brakes, and lighting, accused James of incurring at least $2.3 billion in liabilities. It further alleged that these were based, in part, on fake invoices and double-pledged collateral. Amid ongoing investigations, James stepped down last month, and a fiduciary has been appointed to probe the company's financial practices.