The Economics Show Behind The Money: How First Brands Group collapsed
Jan 2, 2026
Robert Smith, Corporate finance editor at the Financial Times, and Ortenca Aliaj, Banking editor at the Financial Times, dive into the shocking collapse of First Brands Group, a car parts supplier drowning in hidden debt. They discuss the dubious tactics of founder Patrick James and highlight Jefferies' role in the financing debacle. The duo raises alarms about the private credit market's vulnerabilities and the ramifications for financial institutions. With discussions on due diligence failures and regulatory concerns, the conversation uncovers the intricate web of risk in modern lending.
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Tip Led To Major Debt Investigation
- Robert Smith and Ortenca Aliaj traced First Brands from a tip to a sprawling debt story revealing hidden exposures.
- Their reporting showed a small Rust Belt supplier became central to questions about private credit.
Private Credit Filled The Banking Vacuum
- Private credit expanded as banks withdrew after 2008, filling a lending gap for leveraged midmarket firms.
- Ortenca Aliaj highlights that private lenders were often more lenient than banks in scrutiny.
Founder’s Lavish Lifestyle Amid Growth
- Robert Smith recounts Patrick James's rise from immigrant beginnings to a lavish lifestyle as First Brands grew.
- James amassed oceanfront properties and a large Ohio compound at the company's peak.