Raistone Seeks Court Appointment of Independent Examiner in First Brands Bankruptcy
Key Highlights
- Raistone claims up to $2.3 billion in assets are unaccounted for in First Brands' bankruptcy case.
- The company collected $1.9 billion in receivables but has not confirmed if it was received or properly remitted.
- Raistone requests an independent examiner to investigate potential financial misconduct and asset misappropriation.
- First Brands' legal team responded with uncertainty about the receipt of funds and the status of segregated accounts.
- The case raises concerns about transparency and accountability in the auto parts supplier's financial dealings.
Raistone - a trade finance company and a creditor of First Brands - asked a court on Wednesday to appoint an independent examiner. It claims that as much as $2.3 billion "simply vanished" from the U.S. auto parts supplier.
After filing for bankruptcy protection last month, the company has had $11.6 billlion in total liabilities - according to court documents.
“Under these circumstances - with up to $2.3 billion in assets unaccounted for - the appointment of an examiner to conduct an independent investigation is both mandatory and is critical to maximizing recovery for creditors,” Raistone said in the filing to the Texas Southern Bankruptcy Court.
After First Brands filed for bankruptcy, it collected roughly $1.9 billion of factored receivables without remitting it to the proper owners - according to the filing.
Its attorney told Raistone in an email on October 2 that they didn't know if the company received $1.9 billion.
After this, Raistone requested an independent investigator.
“First, do we know whether FBG actually received $1.9 billion (no matter what happened to it)? Raistone's lawyer said, according to an exhibit attached to the court filing. "Second, would you tell us how much is in the segregated accounts in respect of the factored receivables as of today?”
First Brands' lawyer responded with, "“#1 — We don’t know; #2 - $0”.
Raistone believes the investigation was "highly questionable," and raised doubts if the comittee will conduct an in-depth investigation