这个Yale女生把名字改得看不出中国人，这位印度人也是。这些胆大的的确是人才，呵呵。

Auto-Parts Bankruptcy Shatters Dreams of Its Mysterious CEO 

By Alexander Gladstone, John Keilman and Jodi Xu Klein

Patrick James was watching the film “Minari” about a family of South Korean immigrants who moved in the 1980s to rural Arkansas when he leaned over to his son and whispered: “This is what it felt like when I first came to Ohio!”

The Indian businessman immigrated from Malaysia in the 1980s to attend a small college in Ohio. James went on to live the American dream, building an auto-parts colossus with 26,000 employees and billions in annual sales by scooping up smaller companies. His children went to elite U.S. colleges, and the family relaxed at their $23 million Malibu, Calif., mansion.

A business scandal has shattered that dream.

James’s company, First Brands Group, has filed for bankruptcy, acknowledging that more than $2 billion is unaccounted for. Newly appointed directors are probing irregularities in the company’s financing arrangements, and the Justice Department has opened an inquiry, people familiar with the matter said.

First Brands, of which James is chief executive officer and sole equity owner,borrowed more than $10 billion from some big names despite a history of lawsuits from business partners who had alleged that James made misrepresentations in his convoluted financing arrangements. Major banks including UBS Group and Jefferies Financial Group are exposed.

Unbeknown to most, the company raised billions through off-balance-sheet financing, especially through a form of borrowing against money it is owed by customers such as AutoZone. As the shaky finances came into focus this year, James’s backers pulled the plug. The com-

 

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pany’s new directors are working with forensic accountants to investigate whether accounts receivable were pledged more than once, court records show.

A representative for James said, “Patrick James has always put the interests of First Brands Group ahead of his own and is evaluating his best path forward to help maximize value for its customers, suppliers, employees and lenders, including potentially relinquishing his role as CEO.”

A lawyer for James told the court at a bankruptcy hearing that the First Brands collapse was caused largely by macroeconomic factors and denied wrongdoing by management. James has agreed to let the company be led through bankruptcy by a chief restructuring officer.

Interviews with former employees, business associates and others reveal that James was intensely private, going to lengths to avoid his photo being taken and scrubbing himself from the internet. They described him as a germaphobe and “nerdy,” a man who could pass for an engineer or computer programmer.

The CEO kept an office on the 53rd floor in the Key Tower skyscraper in Cleveland, but some First Brands executives said they rarely saw the boss.

James cascaded his directives down the chain of command through emails and intermediaries. He relied on several close confidants, including his brother, Ed James, who held a senior executive role, to operate his increasingly indebted empire.

A First Brands manager described Patrick James as generous and said he received holiday gift baskets that contained wine, expensive electronics and vouchers for vacations worth thousands of dollars. Other managers said bonuses were sometimes delayed; one said that his company- issued cellphones and credit cards occasionally stopped working because the bills went unpaid.

Patrick James came from Malaysia in the 1980s to attend the College of Wooster in Ohio. A college friend said James was more mature and focused than his peers. On the day of their 1988 graduation, the friend recalled, James bought a starter home in Cleveland.

In 1995, James co-founded a holding company called Janna Industries to buy up a stable of Ohio manufacturing businesses.

At 31, the young entrepreneur and his partner were staking their own capital to finance Janna. “We’re risking everything to do these deals,” his co-founder, Anthony Manna, then 34, told Crain’s Cleveland Business.

Janna Industries was dissolved in 2002, Ohio state records show. Manna didn’t respond to requests for comment.

James went on to a number of industrial and automotiverelated businesses before forming the company that later became known as First Brands, under the name Crowne Group.

First Brands accumulated a total of some 25 different brands, including Trico windshield- wiper blades, Fram motor oil and air filters and Raybestos braking components. The empire now has operations on five continents, including factories and warehouses. Revenue reached $5 billion last year, up from $1 billion in 2020, according to S&P Global Ratings.

The company funded its growth by borrowing heavily, raising nearly $6 billion of corporate loans. In addition, the company obtained supplychain financing from institutions that lent against the company’s inventory and receivables.

First Brands would often provide products to customers on delayed-payment terms, and then pledge the accounts receivables to outside investors that provided financing. The extent of these arrangements grew over time into several billion dollars of offbalance- sheet debt.

Over the years, several business partners sued James over his financing arrangements, alleging misleading and fraudulent practices.

In 2018, James split off a piece of his conglomerate called Vari-Form, a Canadian unit that made original equipment for automakers. The remaining portfolio, which included Trico and oversaw the aftermarket business, would later be combined with other businesses and rebranded as First Brands.

James touted Vari-Form as a stand-alone asset and attracted fresh debt capital from new investors, including Apollo Global Management, according to a securities filing and a person familiar with the matter. The next year, Vari-Form filed for insolvency in Canada.

Entering this year, First Brands was being stretched thin after taking on more offbalance- sheet debts, according to lenders. New Trump tariffs on U.S. imports made it more expensive to source goods and materials.

Meanwhile, James was working to refinance the nearly $6 billion of corporate loans with the help of Jefferies. The pitch to prospective lenders didn’t mention the billions of dollars of off-balancesheet debt, people familiar with the matter said. Jefferies didn’t respond to requests for comment.

The refinancing effort soon faltered. Investors became concerned this summer after they learned that Apollo, the private- equity giant, had earlier taken a short position on First Brands through a credit- default swap trade, which was reported by the Financial Times.

Current and potential investors demanded more information on First Brands’ earnings and off-balance-sheet arrangements. With refinancing on ice, First Brands pivoted to trying to sell its entire business.

James remained optimistic and told people close to him that he hoped the companywould fetch at least $12 billion, roughly enough to make everyone whole. No such buyer materialized. On First Brands’ quarterly earnings call with lenders in late August, James said the refinancing was still on track, according to a participant.

Many of First Brands’ business deals had been signed by Ed James or Michael Baker, the company’s strategy chief. The two executives stepped down shortly before the late-September bankruptcy filing. Neither responded to requests for comment.

As First Brands slipped toward chapter 11, top lenders demanded that the company bring in new independent directors to examine its books. Those directors are now looking into whether First Brands had been double-pledging receivables, as well as shifting collateral from one entity to another, court records show. The directors have informed lenders that they have so far found around $2 billion more in borrowings than the underlying accounts receivables.

Restructuring advisers recently briefed lenders that First Brands’ financial information can’t be relied upon and that it is still unclear how much the company owes and to whom.

A lawyer for one financer of receivables linked to First Brands recently asked the company’s bankruptcy counsel two questions. First, did the company actually receive $1.9 billion of payments against receivables that had been discussed. Second, how much money is in specific bank accounts from those payments.

A lawyer for First Brands, from the firm Weil Gotshal & Manges, replied in a succinct email: #1 – We don’t know #2 – $0