Silver Point Capital Enters First Brands Bankruptcy Fray with Claims Buy

DRAPER, UT – December 31, 2025 – In a strategic move signaling a new chapter in one of the year's most dramatic corporate collapses, global credit investing firm Silver Point Capital has acquired a controlling interest in claims against the bankrupt auto parts conglomerate First Brands Group, LLC. The claims, originating from a nearly $1.9 billion financing facility, were purchased from equipment financing specialist Onset Financial, Inc. and its funding partners.

While the terms of the transaction were not disclosed, the deal positions Silver Point, a firm known for its expertise in distressed assets and complex credit situations, as a formidable new player in the contentious Chapter 11 bankruptcy of First Brands. The acquisition transforms a defaulted loan into a strategic asset, giving Silver Point significant influence over the future of a company that owns household names like FRAM filters, Raybestos brakes, and Trico wiper blades.

The Fall of an Automotive Titan

First Brands Group, a Cleveland-based manufacturer, spiraled into a voluntary Chapter 11 bankruptcy on September 28, 2025, in a filing that stunned the automotive industry. The company, which reported approximately $5 billion in net sales for 2024, listed staggering liabilities between $10 billion and $50 billion against assets of just $1 billion to $10 billion.

The collapse followed a multi-year, debt-fueled acquisition spree orchestrated by founder Patrick James, who rebranded his Crowne Group to First Brands in 2020. The company aggressively rolled up over 24 automotive-related businesses, creating a global parts empire. However, this growth was financed by immense borrowing, including $6.1 billion in on-balance-sheet debt and an estimated $4 billion-plus in opaque, off-balance-sheet financing arrangements that ultimately proved unsustainable.

Warning signs had been flashing for months. Credit rating agencies like S&P Global Ratings and Fitch Ratings repeatedly downgraded First Brands, citing its precarious debt load and lack of financial transparency. An attempt to refinance $6.2 billion in debt failed in July 2025 after lenders grew wary and demanded a deeper audit of the company's finances. The situation deteriorated rapidly in the third quarter, with the company experiencing significant negative free cash flow as suppliers began to exit its financing programs.

A Web of Debt and Allegations

The claims now controlled by Silver Point are at the very heart of First Brands' implosion. They stem from a massive $1.9 billion inventory financing facility provided by Utah-based Onset Financial. Onset declared a default on the facility on September 9, 2025, after First Brands missed payments, an event that served as a critical trigger for the bankruptcy filing just weeks later.

Court filings and subsequent investigations have painted a picture of profound financial disarray and alleged misconduct. The company's off-balance-sheet debt, including approximately $2.3 billion in factoring debt and $800 million in supply-chain financing, shocked financial observers. Allegations have surfaced of fraudulent practices used to secure this mountain of debt, including the creation of fake invoices and the "double-pledging" of trade receivables, where the same collateral was allegedly used to secure loans from multiple different lenders.

In the aftermath of the bankruptcy filing, founder Patrick James resigned and has since attempted to shift blame, filing lawsuits against lenders like Onset Financial for what he termed "predatory" and "usurious" financing practices. However, new management appointed to guide First Brands through its restructuring has presented a starkly different narrative. In court testimony, the new leadership team stated it had uncovered evidence of massive financial fraud perpetrated under the previous regime, designed to deceive lenders about the company's financial health and the value of its collateral.

Enter the Specialist: Silver Point's Strategic Play

The entry of Silver Point Capital, which manages approximately $42 billion in assets, is a calculated maneuver typical of a seasoned distressed debt investor. The firm specializes in "special situations" and "credit market opportunities," investing in companies facing financial distress or complex legal challenges. By acquiring Onset's claims, Silver Point is not merely collecting a debt; it is purchasing a seat at the main negotiating table in the bankruptcy proceedings.

This acquisition gives Silver Point a powerful voice in shaping the outcome for First Brands. As a major creditor, the firm can influence key decisions, from the approval of a Chapter 11 reorganization plan to the sale of the company's most valuable assets. Distressed debt investors like Silver Point thrive on complexity, leveraging their deep analytical and legal resources to unlock value where others see only risk. Their objective will be to maximize the recovery on the acquired claims, a goal that could lead to aggressive legal strategies and a push for the divestiture of First Brands' coveted portfolio of brands to strategic or financial buyers.

Onset's Exit and the Path Forward

For Onset Financial, the sale of its claims represents a strategic exit from a high-risk, high-cost situation. Rather than engaging in a protracted and uncertain legal battle within the sprawling bankruptcy case, Onset has opted to convert its illiquid, non-performing claim into a more immediate financial asset. This move de-risks its portfolio, improves its balance sheet, and allows management to refocus on its core equipment leasing business without the immense distraction of the First Brands saga. While the claim was likely sold at a significant discount to its face value, the transaction provides Onset with certainty in an otherwise volatile scenario.

Meanwhile, First Brands Group is fighting to survive. With $1.1 billion in debtor-in-possession (DIP) financing, the company is continuing operations, paying employees, and shipping products to customers like Walmart, AutoZone, and NAPA. Its new leadership is focused on stabilizing the business and running a court-supervised sale process. The inherent value in its brands and the robust long-term outlook for the automotive aftermarket—an industry projected to grow to nearly $450 billion by 2026—make its assets highly attractive. With Silver Point Capital now a central figure in the creditor group, the path to resolving this complex bankruptcy will be intensely scrutinized as the fate of this fallen giant is decided.