First Brands has four potential buyers for units, lawyer says

First Brands has four potential buyers for units, lawyer says

First Brands Advances Bankruptcy Restructuring Amid Uncertain Buyer Landscape

First Brands, the auto parts manufacturer operating under Chapter 11 bankruptcy protection since September 2025, is nearing a settlement with creditors to facilitate the sale of four key business units, according to court filings and company statements. The restructuring plan aims to wind down non-core operations while preserving critical divisions funded by major customers, including Ford and General Motors.

The company has secured $1.1 billion in initial bankruptcy financing but now faces dwindling liquidity, with only $190 million remaining to sustain operations through January 2026. This has accelerated efforts to sell units such as Brake Parts Inc., Cardone, and Autolite, which produce essential components for OEMs. Ford, GM, and Harley-Davidson have provided targeted funding to keep these units operational during the sales process.

However, progress has been hindered by stalled bids and abrupt withdrawals from potential buyers. A proposed sale of the Hopkins Manufacturing plant in Kansas collapsed after a near-finalized bidder unexpectedly exited negotiations, leading to the closure of the 70-year-old facility and layoffs of 118 employees. Similar challenges emerged at the Midwest Distribution Center in Illinois, where 389 workers were laid off following the failure to secure a buyer.

First Brands' interim CEO, Charles Moore, stated that the company has explored "all available options" to secure funding and advance sales but has faced resistance from top lenders, who are pushing for liquidation rather than a second $700 million loan. The company's legal and financial advisors, including Weil, Gotshal & Manges and Lazard, are overseeing the sale process, which may involve divesting the business in pieces or as a whole.

The case highlights broader risks in the auto-parts sector, where aggressive debt accumulation and opaque financing have left firms vulnerable to market shifts. With a $7 million independent investigation underway into alleged financial misconduct, First Brands' path to recovery remains uncertain as it navigates a fragile buyer landscape.