A new investigation by an examiner hired to unravel what led to First Brands’ collapse shows that the scope of its alleged accounting fraud doesn’t just include double-pledged receivables and invented collateral.
The examiner’s preliminary report alleges that First Brands kept two sets of books to track its accounting and that its founder, Patrick James, used overvalued acquisitions to divert company value to himself. First Brands executives also planned to move certain value from the company to a “clean” European company after the company filed for chapter 11, according to the examiner’s report.
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