Credit Funds Sue First Brands Over $60 Million Receivables Sale

A group of funds affiliated with Evolution Credit sued bankrupt auto-parts maker First Brands Group, seeking a ruling that they hold a first-priority lien on the company’s receivables after allegedly buying more than $60 million in invoices that the debtors now claim never existed.

The Evolution funds said they entered into a 2023 factoring arrangement under which they purchased accounts receivable from eight First Brands subsidiaries. However, the company now asserts that since pre-bankruptcy factoring arrangements and records were fraudulent and unreliable, third-party factors like Evolution were left with a “likely worthless unsecured claim,” the funds said in a complaint ...