(Reuters) -First Brands said on Monday founder Patrick James had stepped down as CEO and will be succeeded by Chief Restructuring Officer Charles Moore on an interim basis, as the auto parts maker advances its Chapter 11 bankruptcy process.
The Ohio-based company, which makes filters, brakes and lighting systems, filed for bankruptcy protection in late September, after its lenders began investigating irregularities in the company's financial reporting.
The outgoing CEO's brother, Edward, has stepped
down from his senior position in the company, the Financial Times reported on Friday.
Reuters reported last week that the U.S. Justice Department had launched a probe into First Brands' dealings with creditors and sent an inquiry to the company.
The privately held company disclosed liabilities of about $11.6 billion, according to court documents.
Moore, who has served as the distressed auto parts company's chief restructuring officer since September, will oversee stabilization initiatives and facilitate a court-supervised sale process.
He brings more than 30 years of leadership experience in restructuring and performance improvement across the automotive supply chain, the company said.
First Brands racked up most of its long-term debt by acquiring other parts suppliers and auto repair services over the past 15 years.
U.S. investment bank Jefferies flagged its exposure to First Brands, saying its Leucadia Asset Management fund, through its credit fund Point Bonita, held about $715 million in receivables linked to the company.
However, Jefferies CEO Rich Handler and President Brian Friedman sought to reassure investors in a letter posted on Sunday, saying any potential losses would be "readily absorbable," due to the bank's scale.
Reuters also reported that Morgan Stanley's asset management unit as well as BlackRock and Texas Treasury Safekeeping Trust had asked Jefferies to return some money they invested in the latter's Point Bonita Capital fund.
(Reporting by Aishwarya Jain in Bengaluru; Editing by Sahal Muhammed, Sriraj Kalluvila and Anil D'Silva)
