Jefferies Moves To Limit Fallout From First Brands Bankruptcy

Benzinga

Jefferies shares fell 8% after distancing itself from bankrupt client First Brands. The bank faces up to $45M in losses via a fund tied to major retailers, with analysts warning reputational damage could be more costly.

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00:00It's Benzinga, bringing Wall Street to Main Street.

00:02Jeffries Financial Group sought to distance itself Wednesday from the collapse of long-time

00:06clients First Brands Group, according to Bloomberg. A company filed for bankruptcy last

00:10month amid supply chain financing troubles. They disclosed it holds a $113 million equity stake

00:14in Point Bonita Capital, funded with $715 million in receivables tied to First Brands customers,

00:20such as Walmart and AutoZone. Morgan Stanley analysts estimated Jeffries' potential losses

00:25at up to $45 million. Said reputational damage may prove more severe. The thought has rippled

00:30across Wall Street and snaring lenders, including Western Alliance Bancorp and asset managers such

00:35as BlackRock. Jeffries' shares fell nearly 8% on the news. For all things money, visit Benzinga.com.

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