Western Alliance has filed a lawsuit against Jefferies, claiming breach of contract and fraud related to a $126 million loan associated with the bankrupt auto supplier First Brands. The lawsuit stems from accusations that Jefferies violated a forbearance agreement concerning trade-finance loans tied to First Brands’ receivables. In response, Jefferies asserts that the losses incurred by lenders are attributable to fraudulent activities carried out by First Brands and its leadership, which is presently engaged in selling factory operations and implementing layoffs as part of its bankruptcy proceedings. As a result of the lawsuit and the planned loan charge-off, shares of both Western Alliance and Jefferies experienced significant declines.
Western Alliance sues Jefferies for $126M over loan dispute
