The challenges of renting the giant in Utah, the first brands rescue loan

Digest opened free editor

Rola Khaleda, FT editor, chooses her favorite stories in this weekly newsletter.

The First Brands Group is facing $ 1.1 billion in a legal challenge from assets -backed financing specialist in Utah, which has emerged as the largest known creditor of the American Parting American Parts.

Financial start – a company in Darbar, Utah, which describes itself as a “dominant force and a leadership in the equipment rental and financing industry” – built $ 1.9 billion in exposure to the spare parts manufacturer first in the years before it BankruptcyAccording to legal files.

This makes the specialized company the largest known creditor First brandsWho now revealed that it built nearly $ 12 billion in debt financing and balance. Exposure to the beginning offers some of the biggest names in Wall Street, which face billions of dollars in the process of chaotic bankruptcy.

At the beginning of Tuesday, a “initial protest” was provided to the “DIP” loan (DIP) (DIP) of $ 1.1 billion. This first loan aims to provide the Ohayu manufacturing company with emergency financing.

In its deposit in the bankruptcy court in the southern province of Texas, the lawyers of the Utah -based company wrote that “the first brands owed about $ 1.9 billion” and that the relationship between the private financial company and the auto parts company “dates back to 2017”.

“When dust settles, this court will see that the beginning was the most important supplier for the liquidity of the debtors,” Festal’s lawyer wrote.

DIP loans are a decisive element in bankruptcy in the United States that help stabilize business because it aims to continue trading. The challenges facing these loans are common, but the starting position as the largest known creditor makes his objection great.

People who see the financing of the First Brands inventory, a sign of that a number of private credit companies in Utah have been subjected to bankruptcy.

The deposit revealed that the beginning of “the beginning of more than a billion dollars” of financing for the first brands over the past year, providing funding to support “working capital needs, acquisition of funds, and helping the company to move on and imposing suspended tariff systems.”

Funding has taken the form of sales transactions related to the first brand stocks.

The appearance of itself as “the legitimate owner of the stock and equipment it rented for the first brands” has described a former introduction from the chief structured employee of the bankrupt company as “inaccurate and incomplete.”

The starting lawyers said that she expected to have to “defend her rights strongly in bankruptcy.

Charles Moore, Administrative Director of Alvarez & Marsal, who works as a first -structural chairman of the brands, has previously made data in a legal file covering a set of matters, including that the investigation of first trademark financing outside the budget is studying if “More than once” And “commentled” between the two lenders.

Moore’s statement did not mention that the investigators had identified or confirmed specific cases of violations.

At the same deposit, Moore revealed that the beginning faced major problems in paying the lease financing early in May and that the Utah -based company has provided “patience” for the first brands about this debt.

Moore added that First Brands’s Ficeroy Private Capital – a holding company linked to the founder of the group and its owner Patrick James – pledged 15 percent in the auto parts company in August.

While the beginning is unknown outside its position in equipment and inventory financing, its website has its dominance on the industry. On its website and on its legal file, the company claims that it “funded more than $ 5 billion in equipment financing transactions.”

Inset was established in 2008, describing the only shareholder and CEO Justin Nielsen as “building a power organization” in the Equipment rental, which through its charitable arm “collected hundreds of thousands of dollars for local and national charitable societies.

Financial times I mentioned last week The money related to the Keystone National Group, a private credit company based in Salt Lake City, has also been exposed to inventory debts at First Brands.

KEYSTONE has been estimated by the revenue of more than 50 percent on the debts of the first brand stocks, according to the files with the Securities and Stock Exchange Committee.

He refused the beginning of the comment. A & M, did not respond to First Brands and Keystone immediately to request a comment.