Advisers Move to Calm Creditors After Rescue Loan Loses Value
Advisers to First Brands sought to reassure worried creditors after the value of a $1.1 billion rescue loan took a sharp hit. They said the business has stabilized since it filed for Chapter 11 and that management is working to unlock cash tied up in receivables it cannot currently access.
What happened
The decline in the rescue loan’s value rattled lenders and other stakeholders, who grew cautious about the company’s near-term liquidity. That prompted advisers to step in and outline the current state of operations and the steps being taken to shore up the balance sheet.
Reassurances from advisers
Advisers emphasized two main points:
- Stabilized operations: Management reports that core business activity and cash generation have steadied since the Chapter 11 filing.
- Access to receivables: The company is actively working to free up funds currently trapped in receivables so it can improve liquidity.
Next steps and priorities
To reassure creditors, advisers say the focus will be on restoring predictable cash flow and removing obstacles that prevent receivables from being converted to usable funds. They also signaled a commitment to keep stakeholders informed as those efforts progress.
Why this matters
For creditors and suppliers, access to receivables and stable operations are key to avoiding deeper losses and preserving value during restructuring. If advisers successfully unlock those funds, it could help rebuild confidence and create a clearer path through Chapter 11.
While uncertainty remains, the message from advisers is that immediate business conditions are less volatile than when the loan’s value collapsed — and that improving cash access is the top priority.