First Brands Group, owner of Jasper Rubber, files for Chapter 11 bankruptcy protection, secures $1.1 billion in financing

Automotive parts supplier receives court approval to access $500 million in debtor-in-possession funding to maintain operations and support customers during the restructuring process.

First Brands Group, LLC, a supplier of aftermarket automotive parts, filed voluntary petitions for Chapter 11 bankruptcy relief in the United States Bankruptcy Court for the Southern District of Texas on Sept. 23 to stabilize business operations and facilitate a value-maximizing transaction.

Jasper Rubber is operates under the First Brands Group umbrella of companies.

First Brands Group also announced it had secured $1.1 billion in debtor-in-possession financing from an ad hoc group of cross-holders, which includes substantially all of the company’s first-lien debt holders, to support business continuity during the restructuring process.

“Today’s actions mark an important step toward stabilizing First Brands’ operations and securing a long-term future for the Company’s world-class portfolio of aftermarket automotive part brands,” said Chuck Moore, Chief Restructuring Officer of First Brands in a press release. “With committed funding from our key financial partners, we remain focused on supporting our employees, working with our valued suppliers, and delivering best-in-class aftermarket automotive technology for our customers globally.”

On Oct. 2, the bankruptcy court approved First Brands’ access to $500 million of the total $1.1 billion in debtor-in-possession financing. The DIP financing provides the capital the company needs to maintain operations and meet its commitments to customers and supplier partners.

The court authorization allows First Brands to continue paying employee wages and benefits without interruption, continue customer programs in the ordinary course, and pay vendors and suppliers in full for goods and services provided after the bankruptcy filing.

“We are pleased to have received court approval to access significant new funding and continue operations as usual,” Moore says in a subsequent press release. “This additional financing will enable First Brands to stabilize operations, improve fulfillment of customer orders, and meet our commitments to supplier partners going forward.”

The ad hoc group of cross-holders fully backstops the $1.1 billion financing package, demonstrating financial partner support for the company’s restructuring efforts. Moore expressed gratitude for this backing while emphasizing the company’s commitment to customer service throughout the process.

“We are grateful to our financial partners for their support, and remain laser-focused on delivering for our customers at the highest levels throughout this process,” he says.

First Brands’ global operations continue without interruption during the Chapter 11 cases, maintaining full continuity for international customers, partners, and employees. The company’s international operations remain outside the court-supervised financial restructuring process.

The bankruptcy filing represents a strategic move to address financial challenges while preserving the company’s operational capabilities and market position, said the company.

“We are confident in the strength of First Brands’ industry-leading portfolio and the essential role we play in the automotive supply chain,” Moore emphasized.

The Chapter 11 process provides First Brands with legal protection while it works to restructure its financial obligations and explore strategic alternatives. The substantial debtor-in-possession financing ensures the company maintains adequate liquidity to operate during the restructuring period.

We emailed the company about the impact the filing and restructuring will have on Jasper Rubber and did not receive a response as of publication.