Raistone, a prominent intermediary in First Brands’ financing, is reportedly nearing an acquisition by Marblegate Asset Management, an investment firm. Sources indicate that Raistone, which operates a technology platform linking the car parts manufacturer with larger investors, has become increasingly reliant on facilitating financing for First Brands, now facing bankruptcy.
As bankruptcy proceedings unfold, First Brands’ legal team has disclosed that billions in borrowings secured through off-balance sheet transactions facilitated by firms like Raistone are difficult to trace. Allegations against founder Patrick James include accusations of “fraudulent conduct,” and investors anticipate significant losses on the company’s accumulated $12 billion debt. James has denied these claims.
Raistone has expressed concerns of approximately $2.3 billion in financial discrepancies and is pressing for an independent review as part of the bankruptcy process. The firm asserts it is owed at least $172 million and has facilitated significant loans that investors now argue they should recover.
At a recent conference, Raistone founder David Skirzenski discussed the substantial profits generated from lending to First Brands, despite the ongoing turmoil. Following the fallout from First Brands’ situation, Raistone has downsized its workforce, recently laying off 60 employees and retaining 40.
Marblegate, known for capitalizing on distressed debt opportunities, has a history of tackling challenging investments, including significant stakes in New York City’s taxi medallion loans. Founder Andrew Milgram has previously cautioned about the risks inherent in private credit.
Why this story matters
- The potential sale reflects broader issues in the financing landscape and investor trust.
Key takeaway
- The bankruptcy of First Brands raises questions about financial accountability and the ramifications for involved firms like Raistone.
Opposing viewpoint
- Some industry experts argue that excessive risk-taking in credit markets has been mismanaged, potentially threatening economic stability.
