In a recent Law360 article, Thompson Coburn partner Mark Indelicato discussed the implications of First Brands Group’s proposed Chapter 11 plan, highlighting how the struggling auto-parts manufacturer intends to bring its complex bankruptcy proceedings to a close.
The plan filed last week showed that a global settlement among creditors and future litigation recoveries are key components of First Brands’ Chapter 11 exit strategy, noted Mark.
“This bankruptcy could have dragged on for a year or more and spent millions and millions of dollars more as fees. I think the lawyers and the parties all saw the wisdom of trying to bring this to a quick conclusion and fighting the right fights and trying to recover the money,” he said.
Mark said First Brands’ Chapter 11 filing sent shock waves through the bankruptcy and restructuring world as more information about its debt and accounting issues came to light. “The sheer magnitude of the case really does raise a number of red flags,” he said. “I’m sure, the day after for some of their lenders, the question was, ‘How did this happen? How did we miss this? What went wrong?'”
The free-fall filing was also shocking, he said, due to the number and sophistication of lenders that had worked with First Brands and the bankruptcy’s impacts on the automotive industry and private credit markets
Read the full article here.
