Creditors of bankrupt car parts maker First Brands face mounting losses after asset sales are expected to bring in less than $200 million, far below the company's $12 billion debt load. The company, which makes air filters, windshield wipers, and spark plugs, collapsed last September after financial irregularities prevented a multibillion-dollar refinancing.

Advisers are pursuing sales of several assets with two potential buyers interested, but recovery efforts remain complicated. Court filings allege founder Patrick James funded a lavish lifestyle with company money through a scheme involving "double pledging" collateral and fabricating invoices. Federal prosecutors charged James with fraud in January, while the bankruptcy estate sues both James and Utah-based lender Onset Financial for billions in alleged improper transfers.

First Brands raised $1.1 billion in bankruptcy financing last autumn but quickly burned through the funds as lenders grew unwilling to extend more credit. The bankruptcy loan now trades at less than 20 cents on the dollar, with many lenders selling off their positions at heavy losses. The company's complex capital structure, including traditional bank loans and inventory-backed financings, has created competing collateral claims among creditors.