Here’s what you need to know:
- Premium Guard Inc. and First Brands Group closed on the sale of intellectual property from several of First Brands lines of business, including wipers and filters.
- The move will expand PGI's portfolio of items, its founder and CEO said.
- The U.S. Bankruptcy Court for the Southern District of Texas approved an agreement for First Brands to contract with a company to wind down business in other, unsold units. It will help collect on accounts receivable, executives said.
Premium Guard Inc. (PGI) and First Brands Group closed on the sale of some intellectual property (IP) and other assets from First Brands.
"We are very excited to complete this acquisition after a tremendous effort to bring it across the finish line," says Anan Bishara, founder and CEO of PGI. "This marks an important step in strengthening our platform and positions PGI for expansion into new categories. It also enables us to leverage proven engineering capabilities and accelerate the delivery of innovative, high-quality products to market. The real work begins now as we focus on revitalizing these legacy assets and fully leveraging the patents, engineering and know-how built on decades of ingenuity."
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The acquisition, approved by the U.S. Bankruptcy Court in the Southern District of Texas, includes patents, engineering and technical capabilities in the wiper blades, spark plugs and lift support categories. It includes assets associated with brands such as Autolite, Fram, Trico, Anco, Luber-finer and Strongarm.
"Our commitment to our customers remains at the center of everything we do," Bishara says. "This investment allows us to grow alongside our partners, support their evolving needs and continue delivering high-quality, reliable solutions at scale."
Court approves consultant
The court on Thursday also approved a consultant agreement between First Brands and Hilco to sell off other assets not part of going-concern or IP transactions.
Sunny Signh, an attorney for First Brands, said the parties in the bankruptcy case also are close to filing an agreement to lay out the Chapter 11 plans.
"There's still going to be plenty to do and other stakeholders to speak to," Singh said. "But we are happy to report that we're going to be able to kick this off in the near term."
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The agreement, reached with the help of mediation from another judge, will establish a framework for disputing claims and causes of action in the complex case. First Brands filed for bankruptcy in September and former executives, including the founder and CEO, were indicted in January on federal fraud charges.
"It was a long mediation process and we very briefly want to state for the record that we are still working to finalize the plan documents ... but we are in a place where we do have agreement in principle, which is a remarkable result for these debtors," said AnnElyse Gains, attorney for the case's ad hoc group of creditors.
Judge Christopher Lopez signed a motion to allow First Brands to contract with Hilco to wind down businesses that are part of its brakes, Autolite and Hopkins lines of business. First Brands and some of the debtors finalized an agreement last night, attorneys said.
Charles Kelley, attorney for lender Katsumi, said his client initially questioned the need for contracting with Hilco.
"We learned, frankly, that a number of account obligors ... whose balance sheets are robust ... are becoming reluctant payors," Kelley said. "We think this estate needs to know and understand that we need to shine light on some conduct that we need to take some aggressive action with."
Charles Moore, acting CEO of First Brands, confirmed testimony in court that the company have six customers that own the majority of accounts receivable and have tried to justify nonpayment. He said contracting with Hilco will help First Brands collect money owed to it.
Ivan M. Gold, attorney for one of First Brands' landlords, said the hearing today is a good example of the iceberg theory of bankruptcy.
"The court only sees 10-15% that's above water," he said, adding the motion as signed covered complex issues of performance, logistics, timing and funding. "This would've been nasty without constructive engagement."
Lopez agreed.
"There's a complicated motion. There's a lot of moving pieces in it," Lopez said. "Based upon the constructive work of the parties here today, I think the order has improved and provided additional transparency. There's a lot of people agreeing today, so I'm going to stop right there and take the agreement that's here."
The next hearing in the First Brands case is on Monday.
