Jefferies Comments on Western Alliance Bank Lawsuit
Jefferies Comments on Western Alliance Bank Lawsuit
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non-recoursefinancial
A non-recourse loan is a type of debt where the lender’s recovery is limited to a specific asset pledged as collateral, and the borrower cannot be personally pursued for any remaining balance if the asset’s value falls short. For investors, non-recourse financing shifts downside risk onto the lender and protects a borrower’s other assets, which can affect a company’s risk profile, borrowing costs, and potential returns — much like insurance that covers only the item left as collateral.
NEW YORK--(BUSINESS WIRE)--
Jefferies Financial Group Inc. [JFG] (“Jefferies”) commented today on the lawsuit filed by Western Alliance Bank (the “Bank”) regarding a loan extended by the Bank to the Point Bonita fund that was collateralized solely by receivables purchased from First Brands Group. 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.
