Black Diamond sues BDO over missed First Brands red flags
Updated
Updated · Bloomberg · Apr 30
Black Diamond sues BDO over missed First Brands red flags
10 articles · Updated · Bloomberg · Apr 30
In an April 29 lawsuit, funds managed by Black Diamond said BDO missed extensive factoring and hundreds of millions of dollars transferred to founder Patrick James's personal trust.
The creditor alleges BDO's audits failed to meet generally accepted auditing standards before the auto parts supplier entered bankruptcy and federal prosecutors accused James of fraud.
The case targets the auditor's role in detecting warning signs at First Brands, adding litigation risk as scrutiny grows over the company's collapse and alleged misconduct.
As executives confess to a massive fraud, was the company's auditor merely negligent or willfully blind?
This $12 billion collapse was fueled by 'shadow banking.' How many other companies are hiding similar risks?