Jefferies Financial (JEF) commented on the lawsuit filed by Western Alliance (WAL) regarding a loan extended by the bank to the Point Bonita fund that was collateralized solely by receivables purchased from First Brands Group. Jefferies commented, “That loan was on market terms, was non-recourse, was diligenced by the Bank and entitled the Bank to conduct audits of the underlying receivables and other matters. The Point Bonita fund acted in good faith and with goodwill toward the Bank at all times. Unfortunately, First Brands and its leadership perpetrated a wide-ranging and well-concealed fraud that impacted Point Bonita and the Bank. We regret that the Bank, as well as a range of lenders to and around First Brands, will suffer losses as a result of this fraud. We believe that the lawsuit is without merit and it will be defended vigorously.”
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