First Brands Probing Billions of Off-Balance-Sheet Financing (2)

A newly appointed First Brands Group LLC board committee is investigating the company’s use of roughly $2.3 billion in off-balance sheet financing, which fueled investor concerns before the auto-parts supplier fell into bankruptcy.

The obligations were incurred by special-purpose vehicles connected to a subsidiary and involve the use of factoring, First Brands Chief Restructuring Officer Charles Moore said in a Monday bankruptcy court filing. Factoring is a type of financing used to turn expected revenues into immediate cash.

Moore discussed the investigation, which began before the bankruptcy filing and is ongoing, as part of a broader description of ...