First Brands’ Elusive CEO Weighs Stepping Down as Fallout Builds

(Bloomberg) -- Patrick James, the little-known chief executive officer of bankrupt First Brands Group, is weighing stepping down as fallout from the auto-parts supplier’s swift collapse reverberates across Wall Street.

James is considering “relinquishing his role as CEO,” his spokesperson said in an emailed statement. He “has always put the interests of First Brands Group ahead of his own and is evaluating his best path forward to help maximize value for its customers, suppliers, employees and lenders.”

The Financial Times earlier reported the comment from James’ spokesperson.

The potential move, roughly two weeks after First Brands’ Chapter 11 filing, would intensify questions over how a growing list of financial firms missed red flags surrounding James and the company that he built through a series of aggressive debt-fueled acquisitions. 

As of First Brands’ Sept. 28 filing, its sprawling network of auto-parts factories and distribution centers was on the hook for over $10 billion to some of the biggest firms on Wall Street. One of its creditors has alleged that as much as $2.3 billion has “simply vanished.”

The Justice Department is looking into the circumstances around the First Brands collapse, Bloomberg News reported this week.

James maintained a low profile, with the few public records that mention him indicating he grew up in Malaysia before attending the College of Wooster in Ohio. After working at a mergers and acquisitions firm, James started buying local manufacturers in the auto industry through a network of holding companies and subsidiaries.  

A unit of Fortress Investment Group sued some of the companies in 2011, claiming they had obscured James’ controlling interest and that the companies “share employees and management, do not have separate books and records, have the same address in Solon, Ohio, and are grossly undercapitalized.”

James and his businesses denied the accusations, but paid to settle the case and another that alleged fraud two years earlier. 

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