First Brands Creditors Seek to Sue Aequum as Fraud ‘Enabler’ (1)

Aequum Capital Financial II ignored signs of fraud at auto-parts maker First Brands before the company went bankrupt and should be sued to recover any money the lender made, a committee of unsecured creditors argued in court papers.

Aequum loaned an off-balance sheet unit, known as a special purpose vehicle, $44 million that was eventually funneled to a company connected to First Brands’ founder Patrick James, according to a court filing made public Tuesday. James and his brother Edward have pleaded not guilty to various fraud charges and face a criminal trial.

“Aequum exhibited at minimum a willful blindness to ...