A $25 million deal for First Brands Group to sell the intellectual property of Champion Labs and ten other auto parts brands to Premium Guard, Inc. (PGI) is now in jeopardy. Bankruptcy Judge Christopher Lopez has ruled that NOCO Co., based in Cleveland, must be allowed to submit an offer for at least one of First Brands’ core brands by the end of the week, after claiming it was unfairly excluded from bidding. This has temporarily halted the sale.
First Brands, under financial stress since filing for bankruptcy last September, has pushed for a quick, all-in sale to PGI, warning that splitting the portfolio could threaten the deal. Since the bankruptcy, more than 4,000 jobs have been lost and several plants, including Champion Labs—producer of FRAM and LuberFiner filters—have closed permanently. Other facilities for brands like Autolite, Trico, Anco, Strongarm, and MightyLift have also shut down.
The company faces enormous debt, reporting $5.9 billion in long-term obligations and just $1 billion in cash earlier this year, with analysts estimating up to $8 billion more in undisclosed secured debt. The decision on NOCO’s bid could determine the fate of both the sale and the future of First Brands’ remaining assets.