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Raistone, one of the largest middlemen in First Brands’ financings, is nearing a deal to sell itself to investment firm Marblegate Asset Management, according to people familiar with the matter.
Raistone, which runs a technology platform that helped connect the car parts company with larger investors, became heavily dependent on arranging financing for First Brands, which has since filed for bankruptcy.
Seaport Global, an investment banking and trading firm that also owns a stake in Raistone, has been running a sales process.
A spokesperson for Greenwich, Connecticut-based Marblegate declined to comment. Raistone did not immediately respond.
The deal had yet to be finalised and could still collapse, the people said.
Lawyers representing First Brands in bankruptcy have disclosed that billions of dollars of borrowings by the car parts company, secured through off-balance sheet financings from groups such as Raistone, cannot be accounted for.
They have told a judge that the borrowings were in many cases tied to assets that never existed or were already pledged to other creditors.
First Brands’ new management has since accused founder and owner Patrick James of engaging in “fraudulent conduct” and investors expect to take painful losses on some $12bn of debt the company has amassed. James has denied the allegations.
Raistone alleged in October that as much as $2.3bn had “simply vanished”, as it pushed for the appointment of an outside examiner as part of the bankruptcy proceedings. In its complaint, it said it was owed at least $172mn.
Filings show Raistone also helped arrange hundreds of millions of dollars in loans, which investors are claiming they are owed in the bankruptcy.
Raistone founder David Skirzenski at a conference last week said “a lot of people made a lot of money” lending to the bankrupt car parts maker, as they chased the high yields that it paid on its debt.
Skirzenski said that Raistone had “adjusted staff” levels and was still busy on deals. The Financial Times earlier reported that Raistone had laid off 60 people as a result of the First Brands debacle, keeping 40 in total.
A UBS investment vehicle holds an equity stake in Raistone, the FT previously reported. Soros Fund Management, the $25bn family office of billionaire investor George Soros, also holds a small minority stake, according to people familiar with the matter.
Marblegate is known for going after thorny investment opportunities, typically in mid-sized distressed debt situations.
The firm is the biggest owner of New York City’s taxi medallion loans — which at one point were worth more than $1mn each — and bought up hundreds of millions worth before the pandemic. It eventually partnered with New York City and the taxi driver advocacy group on a bailout package, amid falling medallion prices.
Andrew Milgram, who founded Marblegate in 2008, has been a vocal critic of excessive risk taking in private credit. He told the FT in an interview earlier this year that there had been a “grudging recognition” on Wall Street that a series of credit problems “could be dangerous to the overall economy”.
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