Reuters reported:
Trade finance company Raistone, a creditor of First Brands, asked a court on Wednesday to appoint an independent examiner, claiming that as much as $2.3 billion "simply vanished" from the bankrupt U.S. auto parts supplier.
First Brands had earlier appointed a special committee of independent directors to probe its off-balance-sheet financing and whether invoices were factored more than once.Raistone provides factoring services, buys accounts receivable at a discount, and helped First Brands with its balance sheet. Thus, it had a key role in First Union's problem areas that led to its collapse.
First Union believed it had an unpaid $2.3 billion hole on its balance sheet related to third-party factoring arrangements when it filed for Chapter 11 proceedings. Factoring is a financing method used by companies to sell outstanding customer invoices to investors in return for cash.
First Brands collected roughly $1.9 billion of factored receivables without remitting it to the proper owners, according to the filing.
Fintech Raistone's announcing significant missing funds follows fellow fintech Synapse, which lost up to $96 million in customer money while pretending to be have FDIC coverage.
Raistone's pitch includes:
Raistone enables the financing of billions of dollars in transactions every year. Its best-in-class technology coupled with unparalleled access to institutional capital extends financing to companies of all sizes, fully integrated with the same software platforms they already use. As the world's largest business-to-business embedded finance provider, Raistone works to ensure that all businesses have access to their money, on their terms.
Does that include businesses doing unethical things to illegally lever money "on their terms"? You'd think credible technology and creditor due diligence could ferret that out.
The Synapse debacle remains unresolved to this day after TechGod Marc Andreessen walked away from its stinking carcass. Raistone does not yet belong in in Synapse's category, as much forensic financial work remains to be done. Fintechs and missing money, is it a series of one off events or a potential pattern?
If Raistone becomes the next Synapse will its "full-service broker dealer, $30 billion family office, a $900 billion wealth manager, and international bank" backers walk away like Andreessen?
In August, the CFPB sued the Andreessen-backed banking software company Synapse Financial Technologies Inc., which had declared bankruptcy as the agency probed whether it lost track of millions of dollars in customer funds. But the action has so far resulted in little redress — the now-defunct company agreed to pay a $1 fine and it’s unclear whether the agency will tap its own funds to compensate consumers. A lawyer who represented Synapse didn’t return a call and email seeking comment and the company’s founder didn’t respond to a LinkedIn message.Andreesen's move to Washington likely helped him greatly. Synapse customers? Not so much..
