In hindsight, the telltale signs of trouble were piling up: the Zoom calls where the owner kept his camera off; the angry pushback from his brother when investors asked for invoices to back up their loans; the frequent late payments to suppliers; and the whispers of large off-the-books financing arrangements.
That so few outside of First Brands had a full view of the red flags around the auto-parts supplier before it imploded last month is a stark example of the growing risks of money flooding into the opaque world of private financing. By the time it all came crashing down, the company’s sprawling network of auto-parts factories and distribution centers was on the hook for more than $10 billion to some of the biggest firms on Wall Street: Jefferies, UBS and Millennium, among others.
