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First Brands Group has filed for bankruptcy protection in one of the most spectacular collapses in private debt markets in recent years.
The Ohio-based auto parts company filed for Chapter 11 protection in the Southern District of Texas late on Sunday, formalising the abrupt unravelling of a business that has borrowed billions of dollars in private markets and raised concerns over riskier lending on Wall Street.
First Brands is owned by Malaysian-born businessman Patrick James and makes Michelin-branded windshield wipers in Europe and Carter fuel pumps in the US.
Full details of its finances could take time to emerge given the chaotic nature of its descent into bankruptcy, which was fuelled by concerns over its use of off-balance sheet finance.
First Brands previously told lenders it had $5.9bn of long-term debt in March, against nearly $1bn of cash, but many creditors now fear there are billions of dollars more in opaque financing linked to its invoices and inventory.
This is a developing story
