Western Alliance Sues Jefferies Over $126.4M First Brands Loan Breach
Western Alliance Bancorp. filed a New York state court suit claiming Jefferies Financial Group and affiliates breached contract and committed fraud by halting payments on a $337 million receivables-backed loan, leaving a $126.4 million balance charged off. Jefferies has repaid $211 million to date and says it acted in good faith.
1. Lawsuit Filing Details
Western Alliance Bancorp filed suit in New York state court, accusing Jefferies Financial Group and its affiliates of breaching contract and committing fraud by abruptly ceasing payments that were previously assured under their loan agreement.
2. Loan Background and Charge-Off
The loan, secured by First Brands receivables, had a $337 million balance, of which Jefferies affiliates repaid $211 million before stopping further payments, prompting Western Alliance to charge off the remaining $126.4 million.
3. Jefferies Response and Outlook
Jefferies asserts its affiliate acted in good faith and plans to defend the lawsuit vigorously, while Western Alliance expects to recover the full $126.4 million but acknowledges the legal process will take time to resolve.