Diameter’s Winning First Brands Bet Goes ‘Horribly Wrong’ (1)

After Scott Goodwin and Jonathan Lewinsohn nailed a short bet on First Brands Group, an auto-part supplier that rattled credit markets when it collapsed last year, the two doubled down with a reverse wager — hoping for a second payout.

The move still haunts them.

The long-short bet from the firm they founded, Diameter Capital Partners, has culminated in the biggest loss Goodwin and Lewinsohn have ever seen, the two told investors in a Jan. 8 letter seen by Bloomberg.

Diameter thoroughly reviewed, and continues to assess, what went right and then “horribly wrong” in First Brands, the ...