By Devika Madhusudhanan Nair
(Reuters) -Bankrupt First Manufacturers on Monday sued its former chief government and founder Patrick James, accusing him of orchestrating frauds that left the U.S. auto elements maker bancrupt.
James enriched himself and his household by “misappropriating lots of of hundreds of thousands (if not billions) of {dollars} from First Manufacturers,” the corporate stated in a lawsuit filed with the U.S. Chapter Court docket for the Southern District of Texas.
A lawyer and a separate consultant for James didn’t instantly reply to a Reuters request for remark.
Its chapter has raised considerations about opaque financing within the non-public credit score market and solid a highlight on the publicity of among the world’s high monetary establishments.
First Manufacturers stated James precipitated the corporate to incur at the least $2.3 billion in liabilities primarily based, at the least in vital half, on non-existent or doctored invoices. It additionally accused him of partaking in financing transactions involving special-purpose autos that double-pledged collateral.
James transferred lots of of hundreds of thousands of {dollars} from the corporate to himself or entities affiliated to him between 2018 and 2025, with many of the transfers going down from 2023 to 2025, First Manufacturers added.
James stepped down as CEO final month.
The Ohio-based firm, which makes filters, brakes and lighting methods, has appointed a particular committee of impartial administrators to probe its off-balance-sheet financing.
Earlier on Monday, James filed a authorized movement supporting the appointment by the courtroom of a fiduciary who would examine the corporate’s monetary practices main as much as the chapter submitting.
First Manufacturers filed for chapter safety in September after its lenders started investigating irregularities within the firm’s monetary reporting.
(Reporting by Devika Nair in Bengaluru; Modifying by Miyoung Kim and Edwina Gibbs)
