US auto parts maker First Brands is nearing a settlement with creditors as it advances plans to sell four business units backed by funding from Ford and GM.
Last month, it initiated a marketing and sale process to divest the business, in full or in parts, under its Chapter 11 proceedings.
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In a Houston bankruptcy court filing cited by Reuters, the company said it had been unable to secure a buyer for the group as a whole.
Disclosures of alleged fraud in its pre-bankruptcy lending arrangements and financial statements had eroded confidence among lenders and prospective acquirers.
The company is now progressing individual disposals of its Walbro, Horizon, TMD and Pumps divisions.
These units have continued operating in recent weeks with support from advance payments by major automaker customers.
Ford is purchasing components from three of the businesses earmarked for sale – Horizon, TMD and Pumps – and wants those operations transferred swiftly to financially stronger owners, Ford attorney Mark Freedlander told the court, according to Reuters.
First Brands sought creditor protection in September 2025 with liabilities exceeding $9bn.
The process began with a $1.1bn loan from existing lenders, but those funds were largely depleted by January this year, after which the company turned to short-term funding from Ford and GM to sustain activities.
The group is close to resolving certain disputes between senior lenders and junior creditors, although the asset sales are moving ahead without a full accord on how proceeds will be divided, First Brands attorney Matt Barr said in the report.
First Brands anticipates around two weeks of mediation to secure a final settlement to exit bankruptcy.
The manufacturer has alleged that former management fraudulently pledged some assets multiple times as collateral across different loans, creating conflicts over repayment hierarchy.
Barr told the court the fraud, which has led to indictments of founder Patrick James and his brother Edward James, was “far more severe” than initially understood at the time of the bankruptcy filing and had damaged relationships with customers and suppliers.
