U.S. Government Files $286M Tariff Claim Against Bankrupt Auto Parts Supplier First Brands - Modern Distribution Management

U.S. Government Files $286M Tariff Claim Against Bankrupt Auto Parts Supplier First Brands

The U.S. government says bankrupt supplier First Brands underpaid tariffs on imported goods for years, adding another major development to the company’s ongoing collapse and its growing fallout across the automotive aftermarket distribution channel.
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The U.S. government has filed a roughly $286 million claim against bankrupt automotive aftermarket supplier First Brands Group, alleging the company underpaid tariffs on imported products over multiple years.

The claim — filed by U.S. Customs and Border Protection in the company’s bankruptcy proceedings — centers on alleged underpayment of duties tied to imported automotive parts and components. The filing marks the latest development in the unraveling of one of the industry’s largest suppliers following its September 2025 bankruptcy filing.

First Brands, whose portfolio included brands such as Raybestos, Centric, Cardone, Autolite and FRAM, entered Chapter 11 protection last fall amid mounting debt, operational strain and weakening market conditions. At the time, the company said it planned to continue operating while pursuing restructuring options.

But by early 2026, the company had shifted toward winding down multiple business units and liquidating assets, creating significant disruption across the automotive aftermarket supply chain. Distributors and repair channel customers were left managing inventory uncertainty, supply interruptions and questions around warranty support and product availability.

The bankruptcy also triggered broader fallout for suppliers, distributors and customers tied to First Brands’ extensive aftermarket network. Industry participants reported challenges securing replacement inventory and navigating rapidly changing availability across key product categories, particularly brake and ignition components.

The tariff claim adds another major financial complication to the bankruptcy proceedings. The government alleges First Brands improperly classified certain imported goods and underpaid required duties over an extended period. The claim could become one of the largest unsecured claims in the case.

The company’s collapse has also been accompanied by legal troubles involving former leadership. In January, federal prosecutors indicted First Brands founder Christopher Groves and his brother, Philip Groves, on fraud-related charges connected to the company’s financial reporting and lending practices.

Founded through a series of acquisitions that consolidated numerous aftermarket brands under one corporate structure, First Brands became a major supplier across the North American automotive aftermarket. Its rapid expansion and broad product portfolio made it a significant vendor for distributors and retailers throughout the channel.

The bankruptcy and subsequent liquidation efforts have continued reshaping parts of the automotive aftermarket landscape as distributors, retailers and competing suppliers absorb the fallout from the company’s collapse.

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