Sign up for our weekly email to stay on top of the latest news and insights!
First Brands Group, a global automotive supplier with a significant portfolio of market-leading brake brands, has filed for Chapter 11 bankruptcy protection for its U.S. operations. The filing follows a period of deep financial distress, including severe payment delays to suppliers and intense creditor scrutiny over a multi-billion dollar debt load, raising concerns about potential disruptions for the brake industry.
Key Highlights
- First Brands, owner of Raybestos®, Centric® Parts, and StopTech®, has filed for Chapter 11.
- The court-supervised process applies solely to the company’s U.S. operations.
- The filing was preceded by payment delays that were four times the industry average.
- First Brands has secured $1.1 billion in financing to maintain business continuity.
- The company’s financial distress escalated after a $6 billion refinancing effort failed.
A Deeper Look at Financial Distress
The bankruptcy was foreshadowed by mounting liquidity pressures, with data provided by Creditsafe revealing the extent of the company’s payment struggles. Over the last 12 months, First Brands struggled to pay its suppliers, with its Days Beyond Terms (DBT) consistently reaching four times higher than the industry average. At one point, its DBT rose to 55 days when the industry average was only 10.
Furthermore, an increasing number of the company’s outstanding bills fell into the 91+ days late category. This figure jumped to over 57% in early 2025, a clear red flag of the severe cash flow issues that ultimately led to the bankruptcy filing.
Related: Confirmed: First Brands Group Files U.S. Chapter 11
The Road to Chapter 11
First Brands’ financial woes became critical after a crucial $6 billion debt refinancing attempt was halted in August. Lenders paused the deal to demand an independent review of the company’s earnings and its extensive use of off-balance-sheet financing, specifically factoring agreements.
This pressure was compounded by the Chapter 11 filing of affiliated financing companies operating under the Carnaby Capital Holdings umbrella, which were used by First Brands to secure financing. These events highlighted the severity of the company’s cash issues, leading to the eventual bankruptcy filing of its U.S. entities.
Impact on the Brake Industry
The bankruptcy of a company with such a significant presence in the brake market warrants close attention from industry professionals. First Brands’ portfolio includes some of the most well-known names in the aftermarket, including Raybestos® complete brake solutions, Centric® Parts replacement components, StopTech® performance brakes, and Carlson® brake hardware.
The Chapter 11 filing initiates a court-supervised restructuring that could lead to changes in brand ownership, product lines, and distribution strategies. The future of these highly-regarded brake brands is now subject to the outcome of these proceedings.
Related: Brake Giant Faces Restructuring
Restructuring and Path Forward
To support its business during the restructuring, First Brands has secured $1.1 billion in debtor-in-possession (DIP) financing. This funding is intended to provide the necessary capital to maintain normal operations.
The company has emphasized that the Chapter 11 cases pertain only to its U.S. operations, and all international business is expected to continue without interruption. First Brands has also filed customary “First Day Motions” to continue paying employee wages and honor commitments to vendors and customers.
Subscribe Today!
Sign up for our weekly eNewsletter and get a free copy of our quarterly digital magazine.
