Rebel Capitalist News Another Huge Bankruptcy Just Rocked Wall St (What You Need To Know)
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Oct 13, 2025 A major corporate bankruptcy is shaking Wall Street, with First Brands' shocking collapse at the forefront. The discussion unveils the company's complex borrowing schemes and concerning financial maneuvers, including rehypothecation of receivables. Alarmingly, nearly $2 billion is unaccounted for, triggering a DOJ inquiry. The ripple effects could endanger major banks and raise questions about inflated asset valuations in AI and other sectors. Don’t miss the chance to learn more in an upcoming webinar for a special bonus!
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Small Business, Massive Shadow Leverage
- First Brands, an auto-parts seller, borrowed billions via complex off‑balance‑sheet vehicles and rehypothecated receivables.
- That setup exposed hidden leverage and systemic contagion risks for lenders and shadow banks.
Rehypothecation Multiplied Credit Risk
- First Brands allegedly rehypothecated the same accounts receivable many times to raise far more debt than collateral justified.
- That made a $50M receivable potentially underwrite vastly more borrowing, creating opaque, fragile credit chains.
Billions Missing During Bankruptcy
- During the bankruptcy process, First Brands couldn't account for about $1.9–2.3 billion; the money is "not here."
- That missing sum drew a Department of Justice inquiry into possible wrongdoing.