Jefferies disputes Western Alliance Bank lawsuit over Point Bonita loan

Jefferies Financial Group Inc. (NYSE: JEF) stated it will defend against a lawsuit filed by Western Alliance Bank regarding a loan to the Point Bonita fund, according to a company statement.

The dispute centers on a non-recourse loan extended by Western Alliance Bank to the Point Bonita fund, which was collateralized by receivables purchased from First Brands Group. Jefferies said the loan was made on market terms and that the bank conducted due diligence and retained audit rights over the underlying receivables.

Jefferies attributed losses to what it described as fraud perpetrated by First Brands Group and its leadership. The company stated that Point Bonita acted in good faith throughout its dealings with the bank.

"We regret that the Bank, as well as a range of lenders to and around First Brands, will suffer losses as a result of this fraud," Jefferies said in the statement. The company characterized the lawsuit as without merit.

The statement indicates that multiple lenders connected to First Brands Group have experienced losses related to the alleged fraudulent activity. Jefferies did not specify the loan amount or potential losses involved in the dispute.

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