**Jefferies Seeks Oath from First Brands Founder Amid Legal Dispute**
Jefferies Financial Group is pushing to question Patrick James, the founder of First Brands, under oath, arguing that his potential invocation of the Fifth Amendment does not exempt him from an upcoming deposition. In a court filing on Monday, Jefferies’ Leucadia Asset Management stated that James holds “critical information” regarding the creation and sale of invoices, which is pertinent to their request to access customer funds.
James has indicated that he may plead the Fifth Amendment to avoid answering questions, citing an ongoing federal criminal investigation. However, Leucadia contends that the Fifth Amendment does not permit a witness to evade a deposition “before any questions are asked.” They further noted that James has publicly denied any wrongdoing, including in court and various filings, which undermines his argument for avoiding testimony.
First Brands has accused James of misappropriating company funds and claims that prior to its bankruptcy, the auto parts supplier raised capital by selling fictitious or altered invoices. Jefferies, along with other creditors and U.S. authorities, is investigating the circumstances surrounding First Brands’ bankruptcy filed in September.
A spokesperson for James reiterated that he had no involvement in issues related to First Brands’ customer funds and therefore lacks relevant information for Jefferies. He has consistently denied any allegations of misconduct, asserting that he has “always acted ethically.” Additionally, a former finance director at First Brands has indicated he would also invoke his Fifth Amendment rights if compelled to answer creditor inquiries.
Leucadia emphasized the need for information to understand how First Brands’ invoices were generated and their connection to legitimate receivables. Initially, Leucadia sought information from First Brands, which directed them to James and another former vice president.
Through its Point Bonita Capital hedge fund, Leucadia reported that it paid over $715 million to First Brands for receivables that were outstanding at the time of the Chapter 11 filing. Jefferies has stated that its indirect investments represent approximately $43 million, or 5.9%, of Point Bonita’s accounts receivables purchased from First Brands, along with a $2 million interest in company bank loans through a separate platform.
A federal judge is set to review James’ situation in the near future.
**FAQ**
*What is the Fifth Amendment and how does it relate to depositions?*
The Fifth Amendment protects individuals from self-incrimination, allowing them to refuse to answer questions that may incriminate them. However, it does not allow a witness to avoid a deposition entirely before any questions are posed.
