US Justice Department opens inquiry into First Brands collapse, FT reports

(Reuters) -The U.S. Department of Justice has launched an inquiry into the collapse of bankrupt auto parts maker First Brands Group, the Financial Times reported on Thursday, citing people familiar with the matter. The probe, led by the U.S. Attorney's Office for the Southern District of New York, is at an early stage and being described as a fact-finding mission, the report said. First Brands did not immediately respond to Reuters request for comment. Such probes do not necessarily mean any wrongdoing has occurred and may not lead to charges being filed or cases being brought, report added. First Brands, which makes filters, brakes and lighting systems for the automotive, filed for bankruptcy protection last month after its lenders began investigating irregularities in the company's financial reporting. The company has $11.6 billion in total liabilities, according to court documents. The auto parts maker has separately appointed a special committee of independent board directors to investigate its off-balance sheet financing arrangements and whether its invoices were factored in multiple times. Financial troubles at First Brands and the recent bankruptcy of subprime lender Tricolor Holdings, have rattled debt investors and stoked fears of broader stress in corporate debt markets, according to bondholders and bankruptcy experts. Some of the financial firms exposed to First Brands include Jefferies, which disclosed $715 million in exposure through Leucadia Asset Management, and UBS, which is assessing exposure on more than $500 million tied to the company. (Reporting by Prakhar Srivastava in Bengaluru; Editing by Shailesh Kuber)

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