Monetary Matters with Jack Farley Demystifying First Brands Group’s $ 12 Billion Bankruptcy | Robert Smith of the Financial Times
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Nov 24, 2025 Robert Smith, Corporate Finance Editor at the Financial Times, sheds light on the shocking $12 billion bankruptcy of First Brands Group. With deep expertise in bankruptcies and private credit, he unpacks the company’s complex capital structure and the hidden liabilities revealed during the proceedings. Smith warns of the potential for broader instability in the private credit market, comparing First Brands to other recent failures. He also critiques the transparency of financial institutions involved and discusses the implications for investors and managers.
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Roller Growth Hid Financial Fragility
- First Brands grew by serial acquisitions funded largely with borrowed money, becoming a classic "roller" that piled on debt to buy companies.
- That acquisition-by-debt model masked financial fragility and amplified risk across lenders and funds.
Opaque Off‑Balance Financing Masked Liabilities
- First Brands' capital structure mixed traded syndicated loans and opaque off‑balance-sheet working capital finance.
- The off‑balance-sheet inventory and invoice financing created hidden liabilities that surprised many lenders.
Onset's Flashy Role In Lending
- Onset Financial was a flashy Utah equipment‑leasing firm that lent heavily to First Brands and marketed itself aggressively.
- First Brands' management and local private credit investors also held exposures to Onset deals, compounding conflicts.