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First Brands founder indicted for fraud after bankruptcy that hit lenders, Ford, GM
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104.1 KSGF
By Jonathan StempelNEW YORK, Jan 29 (Reuters) – The founder of First Brands has been indicted by federal prosecutors for allegedly defrauding lenders out of billions of dollars before the auto parts supplier collapsed into bankruptcy.
His brother Edward James, who had been a First Brands senior vice president, faces most of the same charges.
But according to the indictment, the Jameses manufactured that growth through “a series of fraudulent schemes” against lenders and financing partners.
FORD, GM TO PROVIDE SOME HELPAt a Thursday hearing in Houston bankruptcy court, First Brands received a judge’s permission to obtain short-term financing from Ford and GM.
Despite borrowing $1.1 billion after filing for bankruptcy, First Brands said earlier this month that cash on hand had shrunk to $190 million.