Jefferies Wants First Brands Founder Questioned Under Oath
Investment Bank Says Even if Patrick James Pleads the Fifth, He Cannot Avoid Deposition
Key Takeaways:
- Jefferies Financial Group is seeking to depose First Brands founder Patrick James, arguing his intent to invoke the Fifth Amendment does not excuse him from appearing under oath.
- Jefferies’ Leucadia Asset Management said James has critical information about allegedly fabricated invoices tied to efforts to unlock customer funds after First Brands’ September bankruptcy.
- A federal judge is set to consider James’ request to block the subpoenas Jan. 6 as investigations by creditors and U.S. authorities continue.
[Stay on top of transportation news: .]
Jefferies Financial Group is pressing to question First Brands founder Patrick James under oath, saying the former CEOpotentially invokinghis constitutional right against self-incrimination doesn’t mean he can avoid an upcoming deposition.
Jefferies’ Leucadia Asset Management said in a Jan. 5 court filing that James possesses “critical information” about the creation and sale of invoices that’s relevant to a company request tounlockcustomer funds. James has said he’d likely plead his Fifth Amendment right against self-incrimination in a bid to block Jefferies’ subpoenas, citing a federal criminal investigation.
The Fifth Amendment doesn’t allow a witness to avoid sitting for a deposition “before any questions are asked,” Leucadia said, adding that James “has loudly and publicly denied the allegations of wrongdoing, including in open court and in multiple filings — precluding any argument that he can now avoid testifying.”
First Brands hasaccusedJames of misappropriating company funds and alleged that, before bankruptcy, the auto parts supplier raised money by selling nonexistent or doctored invoices. Jefferies, other First Brands creditors, company advisers and U.S. authorities are investigating the circumstances around the auto parts supplier’s September bankruptcy, according to court papers.
James’ spokesperson, when asked for comment, referred to a previous statement asserting that the company founder played no role in matters related to First Brands’ customer funds and therefore has no relevant information to provide Jefferies. He has denied allegations of wrongdoing and said he “has always acted ethically.”
Johan Land of Samsara explores how fleets are adopting AI to revolutionize their safety programs.Tune in above or by going to .
Aside from James, a former First Brands finance director has alsosaidhe’d assert his Fifth Amendment right if forced to answer creditor questions. Other current and former First Brands managers have sought to tap insurance to cover the cost of investigations by creditors and the Department of Justice, according to court papers, which is common when a bankrupt company is accused of fraud.
Leucadia said it requires information to determine how First Brands invoices were generated and sold and what relationship those documents have to genuine invoices and receivables. The firm first sought information from First Brands, which directed Leucadia to James and another former vice president, according to court papers.
Leucadia,acting throughits Point Bonita Capital hedge fund, said in its court filing that it paid more than $715 million to First Brands to purchase receivables that remained outstanding at the time the auto parts supplier filed Chapter 11 in late September.
Jefferieshas saidits indirect investments “effectively comprise $43 million, or 5.9%, of Point Bonita’s accounts receivables purchased from First Brands” as well as a $2 million interest in company bank loans through a separate platform.
A federal judge is scheduled to consider James’ request to block the subpoenas Jan. 6.
Want more news? Listen to today's daily briefing belowor go here for more info:
