Western Alliance Sues Jefferies for $126.4M Breach Over First Brands Receivables
Western Alliance is suing Jefferies for $126.4 million, alleging breach of contract and fraud over receivables from collapsed First Brands. A Jefferies affiliate had repaid $211 million of a $337 million loan since last fall before abruptly halting payments, prompting Western Alliance to charge off the full balance.
1. Lawsuit Filing and Allegations
Western Alliance Bancorp filed suit in New York State Court against Jefferies Financial Group and affiliates, accusing them of breach of contract and fraud for intentionally failing to repay the remaining $126.4 million on a receivables-backed loan linked to First Brands Group's bankruptcy.
2. Loan Repayment History and Charge-off
A Jefferies affiliate had repaid $211 million of the $337 million receivables loan since it was extended last fall, but halted payments last week, prompting Western Alliance to charge off the full $126.4 million balance.
3. Jefferies Response and Legal Outlook
Jefferies maintains its affiliate acted in good faith, cites audit rights over the underlying receivables and plans to defend vigorously, while Western Alliance expects to recover the full amount but acknowledges the legal process may be lengthy.