The U.S. Trustee, a federal watchdog overseeing bankruptcy cases, has joined a creditor’s request for an independent investigation into the financial collapse of First Brands Group, the parent company of Champion Laboratories in Albion and Airtex, formerly Fairfield’s largest employer.
In court filings, the Trustee argued that “serious allegations of fraud, dishonesty, incompetence, misconduct, or mismanagement” justify an expedited process to appoint a bankruptcy examiner in First Brands’ insolvency case. The Trustee’s attorney has asked Bankruptcy Judge Christopher Lopez to move a hearing on the request up to Wednesday, October 29.
At the center of the investigation demand is First Brands’ admission that it cannot account for $2.3 billion connected to off-balance-sheet financing deals. Raistone, a short-term financing provider and major creditor, called the company’s internal review “woefully insufficient given the magnitude of potential misconduct.” Raistone, which identified First Brands as its largest client, said the company’s collapse forced it to lay off dozens of employees.
The first hearing in the bankruptcy case was held October 1 in Houston, Texas, drawing more than 500 attorneys in person and via video, with another 250 participating by phone.
Founded in 2013 and headquartered in Cleveland, Ohio, First Brands claims to employ 26,000 people worldwide. Its well-known brands include Fram filters manufactured in Albion, Trico wiper blades, and Airtex automotive pumps.