First Brands’ Elusive CEO Weighs Stepping Down as Fallout Builds
(Bloomberg) — Patrick James, the little-known CEO of bankrupt First Brands Group, is weighing resignation as the effects of the auto parts supplier’s rapid collapse reverberate across Wall Street.
James is “considering relinquishing his role as CEO,” his spokesman said in an emailed statement. He “has always put First Brands Group’s interests ahead of his own and is evaluating his best path forward to help maximize value for his customers, suppliers, employees and creditors.”
The Financial Times previously reported the comment from James’ spokesman.
The potential move, which would come about two weeks after First Brands’ Chapter 11 filing, would intensify questions about how a growing list of financial firms missed red flags surrounding James and the company he built through a series of aggressive debt-fueled acquisitions.
As of First Brands’ filing on Sept. 28, its sprawling network of auto parts factories and distribution centers was tied to some of the largest firms on Wall Street for more than $10 billion. One of the creditors claimed that $2.3 billion “just disappeared.”
The Justice Department is investigating the circumstances surrounding the collapse of First Brands, Bloomberg News reported this week.
James has kept a low profile, with few public records stating that he grew up in Malaysia before attending the College of Wooster in Ohio. After working at a mergers and acquisitions firm, James began acquiring local manufacturers in the automotive industry through a network of holding companies and subsidiaries.
A unit of Fortress Investment Group sued some companies in 2011, claiming they concealed James’ controlling interest and that the companies “shared employees and management, did not have separate books and records, had the same address in Solon, Ohio, and were grossly undercapitalized.”
James and his businesses denied the accusations but paid to settle the case and another that alleged fraud two years ago.
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