First Brands Group LLC, the parent company of Champion Laboratories in Albion and Airtex Products, has collapsed amid a spiraling financial scandal. Lenders are now scrambling to recover an estimated $2 billion in missing funds.
On Monday, company founder and CEO Patrick James resigned just weeks after the Ohio-based auto parts giant filed for bankruptcy. An attorney representing the lenders described the company’s downfall as a “controlled crash landing.”
Charles Moore has been appointed chief restructuring officer, replacing James.
Albion Mayor Wes Harris said Thursday that no one from First Brands has contacted him regarding the bankruptcy or the future of the local manufacturing facility.
Harris said, “This isn’t the first time Champ’s owners have filed for bankruptcy,” He added that he suspects the plant will eventually be acquired by a new owner and that business will continue as usual.
Court filings reveal that First Brands holds between $10 billion and $50 billion in debt, with less than $10 billion in assets. Documents also cite $2 billion in missing funds tied to a growing accounting scandal.
An independent committee has been appointed to investigate $2.3 billion in off-balance-sheet financing that one creditor claims “simply vanished.”
On Wednesday, the bankruptcy judge ordered First Brands to commit funds to pay utility providers and barred utility companies from discontinuing service to any of the company’s manufacturing plants.
The next bankruptcy hearing is scheduled for October 29th in Houston, Texas.
Comments