Jim Chanos: Famous Greek-American short seller warns that the collapse of First Brands signals a wave of corporate collapses.

Some of Wall Street’s biggest names are facing the prospect of multi-billion dollar losses from the bankruptcy of First Brands, a heavily indebted Ohio-based automotive aftermarket maker.

First Brands has now disclosed nearly $12 billion in debt and off-balance sheet financing accumulated in the years before filing for bankruptcy on Sunday, which also trapped lesser-known private lenders such as a Utah-based leasing company.

“I suspect we’ll see more of these things, like First Brands and others, when the cycle finally turns,” Tsanos told the Financial Times, “especially as private credit has put another layer between the real lenders and the borrowers.”

Who is Jim Chanos

Chanos, 67, cemented his reputation by shorting energy company Enron, which, like First Brands, made significant use of off-balance sheet financing and whose $70 billion collapse heralded the start of the stock market crash in 2001.

In 2023, he announced that he was closing his main hedge funds after more than three decades, while continuing to offer personalized advice on fundamental shorting ideas, as well as some macroeconomic insights.

James Steven Chanos is a Greek-American investment manager. He is president and founder of Kynikos Associates, a New York City registered investment advisor focused on short selling. He is also a noted art collector.
Chanos was born in 1957 into a Greek immigrant family living in Milwaukee, Wisconsin, that operated a chain of dry-cleaning shops. He received a Bachelor of Arts in Economics and Political Science from Yale University in 1980.

Chanos lives in Florida. He is a lecturer in finance and a Becton Fellow at the Yale School of Management, where he teaches a class on the history of financial fraud. He is a trustee of the Nightingale-Bamford School and the New-York Historical Society and previously served as president of the board of The Browning School.