Marathon Feels ‘Good’ About First Brands Debt Bought at 40 Cents

(Bloomberg) -- Marathon Asset Management LP bought the term loan of collapsed First Brands Group at around 40 cents on the dollar and sees it as a “great company” with a bad balance sheet, Chief Executive Officer Bruce Richards said.

“We feel good about that position because we think it’s a great company that needs to be restructured,” Richards said Thursday in an interview with Bloomberg Television. Marathon snapped up the term loan “in the 40s,” he said.

Marathon, a distressed-debt investor, is heading up the First Brands steering committee and took the lead in providing the auto-parts supplier a $1.1 billion debtor-in-possession loan. It holds $238 million of the first-lien term loan and $41 million of the second-lien loan, according to court papers. 

First Brands has become one of the biggest distressed situations this year, with its sudden collapse reverberating Wall Street. The company slid into bankruptcy after some loan investors raised questions about its accounting. One creditor has claimed that as much as $2.3 billion has “simply vanished.”

First Brands could potentially leave longtime investors and lenders with steep losses. Marathon, which has been involved in creditor negotiations ranging from Greece during the European debt crisis to AMC Entertainment Holdings Inc. more recently, is focused on its offering of “top brands” that it help it carry on post-restructuring.

“Our job at Marathon is to help this great company exit bankruptcy as soon as possible, so it can go on with a proper accounting system,” Richards said. 

Marathon has also invested in Marelli, another global auto-parts supplier that filed for bankruptcy this year. Richards said the firm has steered clear of subprime consumer loans, as the sector draw more investor scrutiny after Tricolor’s bankruptcy. The loss rate of subprime consumer loans is “huge,” Richards said.

--With assistance from Dani Burger, Matthew Miller and Eliza Ronalds-Hannon.

More stories like this are available on bloomberg.com

©2025 Bloomberg L.P.