First Brands: How Exactly Did $2.3 Billion Vanish?

Co-Sponsored by the National Association of Certified Valuators and Analysts®  (NACVA®) 

	Program Description		Who Should Attend
	How You Will Benefit		Schedule

Program Description
This program will examine the First Brands Group bankruptcy as a real-world case study in off-balance-sheet financing, aggressive factoring practices, and forensic accounting investigation techniques. The course will focus on how factoring arrangements work, how they are properly accounted for, and how misuse or abuse of factoring can materially distort a company’s financial statements and solvency.

Participants will learn the mechanics of invoice factoring, including the differences between recourse and non-recourse arrangements, the flow of cash and customer payments, and the typical accounting and internal controls required to prevent duplicate pledging of receivables. The course will explore how factoring can be used legitimately to manage liquidity, but also how it can become a red flag when it is opaque, unusually large, or poorly controlled.

Using the reported $2.3 billion gap at First Brands, the course will highlight common forensic warning signs such as double factoring, overstated revenues, understated liabilities, weak segregation of duties, and complex intercompany structures used to obscure the true ownership of receivables. Attendees will discuss how off-balance-sheet financing can mask financial distress and delay recognition of insolvency.

The course will also address the role of forensic accountants in bankruptcy and government investigations, including tracing invoices from sale to collection, reconciling factoring proceeds, identifying duplicate or altered invoices, and evaluating whether financial statements fairly presented the company’s condition. The course will conclude with practical lessons for forensic accountants, valuation professionals, and expert witnesses when analyzing solvency, fraud risk, and financial reporting integrity in distressed companies.

How You Will Benefit
After completing this course, attendees will be able to:

• Differentiate how invoice factoring works, including the differences between recourse and non-recourse arrangements and their impact on cash flows and financial reporting
• Identify how off-balance-sheet financing structures can be used to obscure a company’s true financial condition and delay recognition of financial distress
• Recognize common red flags associated with aggressive or improper factoring, including double factoring, duplicate pledging of receivables, and weak internal controls
• Analyze how improper factoring can lead to overstated revenues and assets, and understated liabilities and expenses
• Apply forensic accounting techniques to trace receivables from sale through collection to identify invoices that may have been factored more than once
• Evaluate the role of intercompany transactions and complex entity structures in facilitating or concealing factoring-related financial irregularities
• Assess the implications of factoring abuses on solvency analyses, bankruptcy proceedings, and creditor recoveries
• Identify the role of forensic accountants, special committees, and government investigators in uncovering financial shenanigans involving off-balance-sheet financing

Take Aways
After completing this course, attendees will be able to explain how invoice factoring and other off-balance-sheet financing arrangements operate and how they affect financial statements and cash flows. They will be able to identify red flags indicating improper or fraudulent factoring, including double factoring and understated liabilities. Attendees will be able to apply basic forensic tracing techniques to follow receivables from sale through collection and assess whether invoices were pledged more than once. They will also be able to evaluate the impact of factoring abuses on solvency analyses and bankruptcy-related financial reporting.

Who Should Attend

Delivery Method Group Internet-Based Program Level Basic Advanced Preparation None Prerequisites Previous training or experience with the fundamentals of accounting, finance, economics, and business writing. These individuals are often at the staff or entry level in organizations, although such programs may also benefit a seasoned professional with limited exposure to the area.   Auditing 1 Total CPE Hours   1

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