First Brands’ Elusive CEO Considers Stepping Down
Patrick James, the chief executive officer with bankrupt First Brands Group is considering quitting as the ripple effects of rapid downfall of the auto-parts supplier shakes Wall Street.
James is considering “relinquishing his role as CEO,” according to reports. He “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.”
The potential move, roughly two weeks after First Brands’ Chapter 11 filing, would intensify questions over how a growing list of financial firms missed red flags surrounding James and the company that he built through a series of aggressive debt-fueled acquisitions.
As of First Brands’ Sept. 28 filing, its sprawling network of auto-parts factories and distribution centers was on the hook for over $10 billion to some of the biggest firms on Wall Street. One of its creditors has alleged that as much as $2.3 billion has “simply vanished.”
The Justice Department is looking into the circumstances around the First Brands collapse, Bloomberg News reported this week.
Also Read: TTK Group Chairman Emeritus TT Jagannathan Passes Away
James maintained a low profile, with the few public records that mention him indicating he grew up in Malaysia before attending the College of Wooster in Ohio. After working at a mergers and acquisitions firm, James started buying local manufacturers in the auto industry through a network of holding companies and subsidiaries.
Also Read: India's New Leaders Chart New Growth Trajectories
A unit of Fortress Investment Group sued some of the companies in 2011, claiming they had obscured James’ controlling interest and that the companies “share employees and management, do not have separate books and records, have the same address in Solon, Ohio, and are grossly undercapitalized.”
Also Read: Nvidia Partner Hon Hai’s Sales Rise 11 Percent
James and his businesses denied the accusations, but paid to settle the case and another that alleged fraud two years earlier.