First Brands’ Fall Renews Concerns Over Murky Trade Finance

(Bloomberg) -The first group of automatic parties suppliers applied for bankruptcy on Sunday.

The lesser -known company helps businesses to provide short -term financing while trying to delay customer payments or attempting to delay payments. On Tuesday, the New York -based company left dozens of workers as the opportunities it worked for for the first brands.

The collapse of the first brands is the latest example that facilitates the apparently low -risk processes that lead to problems for companies and lenders in things known as Raistone and trade financing. At the end of last year, Stenn Technologies, a Raistone contestant, collapsed in a dramatic way after introducing ordinary corporate lending products that prove that it was something else. The biggest bust in the sector came in 2021, when Greenil Capital’s bank deposits and insurance funds to risky companies to short -term loans, and as a result, Credit Suisse Group AG contributed to the forced sale of AG.

Raistone is familiar with these past problems. He offered to buy Stenn’s stranded customers, and Dave Skirzensky, the founder of Raistone, was one of the first employees in Greenillll. He left that firm years ago and has no claim to make wrong against Raistone or the first brands. According to the review of LinkedIn profiles, a few of Raistone’s workers have previously worked in Stenn.

Connections between these non -installed corporate accidents underline questions surrounding vehicles and platforms that provide easy access to short -term corporate financing, which are often connected to some future revenues. Intermediaries such as Raistone and Greenill aim to make these markets available for a more efficient and wider business series, while borrowers, lenders and even platforms can hide some risks for themselves.

“The innovation in trade financing had to be good, but often, these financial innovations benefit and companies hide some kind of information and take more risks,” he said.

“Sometimes this risk explodes,” he added.

Both Raistone and First Brands refused to comment.

Organizers and accounting experts have given alarms about the growth of non -balancing financing techniques used by companies to manage short -term cash flows. The transactions between the investment class companies and lenders carry low risk, but cracks may occur for more shaki financial -based businesses. The financing of these agreements has come to a large extent from the asset managers and insurance companies rather than the banks that provide it, and have created additional visibility problems for investors and regulators.

In 2022, after the collapse of Greensll, US accounting managers required companies to explain the magnitude and basic terms of a kind of finance, called supply chain financing, which were generally offered as supply chain financing to suppliers. Nevertheless, even with new rules, many of the creditors of the first brands felt that they were left in the dark until bankruptcy.

This week, the court applications offer many loans to the first real view of what is going wrong with the first brands, which has seen that the value of loans has fallen a few weeks after a few weeks of concerns about the non -balancing financing.

The Michigan -based company, which owns car brand brands such as Carter fuel pumps and TrICO wiper knives, was thought to have a debt of approximately $ 6 billion. However, when applying for bankruptcy on Sunday night, there was over $ 10 billion in extraordinary obligations and only $ 10 billion to $ 10 billion.

The company is the owner of a businessman holding a low -profile Patrick James and channels most of his financing through a network of intermediaries of James.

Charles Moore, the chief reconstruction officer, said he had applied for a court. Some of the inventories that support these facilities may be “past” by securing a separate asset -supported credit facility with collateral.

The declaration opened on Tuesday morning showed that the first brand obligations of $ 2.3 billion could turn the expected future income into a kind of corporate salary loan, such as factoring, such as factoring.

The secure financial network, an industrial group, reported that the total funds used in Factoring this week increased by 13% between the second half of 2024 and the first half of 2025.

The first brands also owed 800 million dollars to creditors offering supply chain financing, and used the borrowing intermediary companies to pay suppliers.

Many of these regulations passed through Raistone, which was listed as the contact point, including the largest three of the unsecured creditors of the first brands with over half billion dollars united claims.

Although Raistone’s exact relationship with these creditors is not detailed in the documents, the website defines it as a manager who puts and plays such a debt with customer investors.

In 2017, Raistone was founded by Skirzensky, who said that he dreamed of “Amazon Trade Finance Services ran, standing among the various players in the 2020 interview.

It provides advertisements to companies wishing to be paid quickly without borrowing ve and to investors who want to present funds with “short tenor”, ​​“low -assumed prices” and “not released from the market”. The company said it has offered financing about $ 15 billion to date.

Raistone is typically listed separately as one of the unsecured creditors of the first brands for a “uncertain amount” depending on both factoring and supply chain financing.

According to the personal LinkedIn profile, Skirzenski would be familiar with this business mixture in Greenil Capital, which he attended in 2013.

After leaving in 2017, Greenil became one of the hottest initiatives in the Fintech industry with a huge investment from Softbank Group Corp.

Lex Greenill, the high -profile founder of Greensill, encouraged the safe nature of loans against the future cash flow, which was guaranteed by invoices. However, it was revealed that most of the money was borrowed against future income rather than real bills. This has become a special problem because Greenillll’s job was largely focused on a handful of risky company.

Some of the same problems appeared in Stenn, another British trade financing Finance, but also faced fake customer lists and fraud charges.

When Stenn came under last year, Raistone put a website for “old Stenn customers looking for an alternative ve and promised interest rates as low as 6%.

-Help from Lucca de Paoli.

(It is updated with details about the dismissal of Raistone in the second and fourth paragraphs.)

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