Wall Street Comes to Fayette: Update

Here's a quick update on my January 16 post about Eagle Machining, First Brands, Fayette, Ohio, and Wall Street's effect on small places.

First Brands founder and CEO Patrick James was arrested yesterday morning in response to an indictment.

The press release issued by the U.S. Attorney for the Southern District of New York charged that James and his brother Edward "perpetrated a years long fraud at First Brands, eventually bankrupting the global automotive company in September 2025.  At the time of its bankruptcy, First Brands—a company that reported approximately $5 billion in net annual sales worldwide—declared just $12 million in cash in its corporate bank accounts and over $9 billion in liabilities.  As a consequence of the defendants’ fraudulent schemes, FIRST BRANDS’ lenders and creditors now face billions in losses."

One First Brands executive has already pled guilty.

"The indictment and the guilty plea unsealed today describe a very different reality: a business run through fraud, fake documents, and false financials," the U.S. Attorney said.

Lenders and creditors do indeed face billions in losses. But some of those lenders, including huge Wall Street players, were eager to give the James brothers the cash despite warning signs that First Brands was engaged in sketchy business. They were eager because they could, and did, charge First Brands high interest rates in the so-called "private credit" market.

Unremarked upon in the release are the jobs lost by hundreds of workers in places like Fayette and how those lost jobs, and the damage to communities, affect the trust, faith, and cohesion of those people and places.

As usual, they pay the price.