Jefferies Addresses First Brands Bankruptcy Concerns, Reaffirms Strong Financial Position

Jefferies Financial Group

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(RTTNews) - Jefferies Financial Group Inc. (JEF) has released a letter from Chief Executive Officer Rich Handler and President Brian Friedman to clarify its position regarding the bankruptcy of First Brands and its potential impact on Jefferies. The letter aims to dispel inaccuracies and provide transparency to clients, shareholders, bondholders, employees, and other stakeholders.

The leadership emphasized that Jefferies remains in sound financial health, with total equity of $10.5 billion and tangible equity of $8.5 billion as of August 31, 2025. Liquidity is robust, with $11.5 billion in cash on hand. The firm also reported strong third-quarter results, which, if annualized, would reflect net revenues of $8.2 billion, earnings before income taxes of $1.3 billion, and net earnings of $1.0 billion.

Jefferies also highlighted its deepening strategic alliance with SMBC, which recently expanded to include $2.5 billion in new and incremental credit facilities. SMBC has expressed its intention to increase its ownership stake in Jefferies from 14.5% to up to 20%, reinforcing confidence in the firm's long-term trajectory.

The company clarified that the issues at First Brands stem from decisions and actions within that organization, including potentially fraudulent or improper conduct currently under investigation by both its Chief Restructuring Officer and reportedly the U.S. Department of Justice. These developments led First Brands to seek bankruptcy protection.

While Jefferies acknowledges the possibility of financial losses related to indirect investments or legal costs associated with First Brands, it remains confident that such impacts are manageable and do not pose a threat to its financial condition or business momentum. The company believes that recent market reactions have overstated the risks and anticipates a correction as facts become clearer.

Jefferies plans to further elaborate on its performance and outlook during its Annual Investor Meeting this Thursday, underscoring its commitment to growth and execution in a favorable operating environment.