Why First Brands’ Collapse Rattled Wall Street: QuickTake

Wall Street has been shaken in recent weeks by the collapse of an auto-parts supplier that filed for bankruptcy with more than $10 billion in debt after questions arose about its borrowing and accounting practices. The unraveling of First Brands Group has ensnared major financial firms, including Jefferies Financial Group Inc., that had lending and other financial arrangements with the company.

First Brands’ meltdown came just weeks after the demise of used car seller Tricolor, raising concerns that troubled loans could surface within other companies or industries. Federal investigators are looking into the circumstances surrounding the collapse of ...