First Brands Probing Billions of Off-Balance-Sheet Financing
Autolite spark plugs at an auto parts store in Provo, Utah.
Photographer: George Frey/BloombergA newly appointed First Brands Group LLC board committee is investigating the company’s use of roughly $2.3 billion in off-balance sheet financing, which fueled investor concerns before the auto-parts supplier fell into bankruptcy.
The obligations were incurred by special-purpose vehicles connected to a subsidiary and involve the use of factoring, First Brands Chief Restructuring Officer Charles Moore said in a Monday bankruptcy court filing. Factoring is a type of financing used to turn expected revenues into immediate cash.