The First Brands Chapter 11 case: filings, DIP loan, examiner and parties

analysisFirst Brands Group, LLC filed a voluntary Chapter 11 petition in the U.S. Bankruptcy Court for the Southern District of Texas on September 28, 2025. Its chief restructuring officer, Charles M. Moore, signed the petition, Weil, Gotshal & Manges LLP acted as counsel, and the petition estimated assets of $1 billion to $10 billion, liabilities of $10 billion to $50 billion and 25,001 to 50,000 creditors on a consolidated basis with all affiliated debtors. The case, No. 25-90399 (CML), is the lead case of the jointly administered First Brands cases in the Houston Division and is assigned to Judge Christopher M. Lopez; Moore's declaration in support of the petitions was filed on September 29, 2025. A later docket summary lists it as a Chapter 7 case with 154 parties and 120 related cases. ^{1 2 3 4}

analysisAccording to that first-day declaration, the special-purpose-vehicle (SPV) debtors had filed their own voluntary Chapter 11 petitions on September 24, 2025 as a protective measure, because remedies threatened by the lenders under the inventory financing facilities could have prejudiced the group's transition into Chapter 11; the remaining debtors filed from September 28, 2025. The declaration counts 112 debtor entities, while a later case summary records First Brands Group, LLC and 98 affiliated debtors filing on September 28, 2025 with funded debt of $9.295 billion. The counts differ because the debtors filed on different days, September 24, 28 and 29, 2025, and the 112-entity figure is the declaration's own count. ^{2 4 5}

analysisA docket summary lists the debtors' advisers: Weil, Gotshal & Manges LLP as bankruptcy counsel for all debtors; Alvarez & Marsal North America, LLC as financial adviser, providing Charles M. Moore as chief restructuring officer; Lazard Frères & Co. for investment banking; Kroll Restructuring Administration LLC as claims and noticing agent; and C Street Advisory Group for strategic communications. The summary dates Moore's appointment to September 26, 2025, whereas the board resolution in the petition records it on September 24, 2025. ^{3 1}

analysisOn October 8, 2025 Judge Christopher Lopez entered a stipulation and agreed order between the debtors, founder Patrick James and the equity holders Mayfair Enterprises LLC, Aztec Corp. and Brake Parts Holdings Inc. James and the equity holders agreed to preserve the debtors' approximately $380 million of federal net operating loss carryforwards, part of which is subject to prior limitations, and not to take any action that could cause an ownership change. These terms are known from a report summarising the order, not from the order itself. ⁶

analysisThe debtor-in-possession (DIP) financing is set out in a Senior Secured Superpriority Debtor-in-Possession Credit Agreement dated October 2, 2025, filed in the case on October 6, 2025 as an exhibit to Document 289. It names First Brands Group, LLC (formerly Trico Group, LLC) as borrower, First Brands Group Intermediate, LLC (formerly Trico Group Holdings, LLC) as parent, the guarantor restricted subsidiaries that are debtors, Wilmington Savings Fund Society, FSB as administrative and collateral agent and OPY Credit Corp. as trading agent. The facility comprised $1.1 billion of new-money term loans, provided by an ad hoc group of the debtors' first- and second-lien creditors with an initial draw of $500 million shortly after the petition date, plus roll-up loans of up to $3,300,000,000, created by assigning certain prepetition first-lien and sidecar term loans as the new money was funded. Morgan Stanley Senior Funding, Inc. signed as fronting lender, and the members of the ad hoc group agreed to purchase the new-money loans from it. ^{1 2}

analysisThe agreement defines the Ad Hoc Group as the DIP lenders and prepetition first-lien, sidecar and second-lien term lenders represented by Gibson, Dunn & Crutcher LLP as legal counsel and Evercore Group L.L.C. as financial adviser, and names Alvarez & Marsal Holdings, LLC as the borrower's financial adviser. It recites that on the petition date the lenders under the First Lien Term Loan Agreement of February 2, 2018, for which Jefferies Finance LLC was administrative and collateral agent, were owed approximately $4,625,413,695.97 of principal, and that certain lenders had provided $24,500,000 of incremental term loans, the prepetition bridge facility, under Amendment No. 18 dated September 25, 2025. The new-money loans bear interest at 10.00% a year for SOFR or EURIBOR loans, of which 1.55% is paid in cash and 8.45% in kind; the roll-up loans bear 7.00% a year paid in kind. ¹

analysisThe lenders attached conditions and controls to the money. Each extension of credit had to be approved by the chief restructuring officer; each loan party had to be unaware, after due inquiry, of any fraudulent activity in its business after the petition date; commitments under the prepetition asset-based facility, or a related DIP facility, had to be at least $250,000,000 unless the court approved the use of that facility's cash collateral; and the borrower had to maintain the "big 7" factoring programs on a best-efforts basis. A condition of the first funding was a parent guaranty executed by Viceroy Private Capital, LLC and First Brands Group Holdings, LLC in favour of Wilmington Savings Fund Society, so that the two parent companies guaranteed the DIP loans to First Brands Group, LLC. All cash received by the debtors, including tax refunds, had to be held in an account subject to perfected liens and a deposit account control agreement in favour of the collateral agent, with control agreements over the existing deposit and securities accounts within 45 days of closing. Shekhar Kumar, Senior Vice President – M&A, signed the agreement for both the parent and the borrower. ¹

analysisThe agreement also reached into governance. Section 6.27 required First Brands Group Intermediate, LLC to appoint a new independent director to its board of managers from two nominees provided by the ad hoc group, to reconstitute the board's restructuring committee with that director and two existing independent directors, and to give the committee exclusive authority to oversee the Chapter 11 cases and any sale process and to investigate potential claims against insiders and affiliate transactions. The borrower had to keep a chief restructuring officer acceptable to the required lenders, who consented to Charles Moore of Alvarez & Marsal, and the borrower, Alvarez & Marsal, Lazard and the borrower's counsel had to hold calls every two weeks with the lender advisors on the investigation of insider claims and affiliate transactions. ¹

analysisOn September 30, 2025 the debtors sought access to the $1.1 billion of new money, $500 million of it on an interim basis, and authority to roll up $3.3 billion of prepetition debt; on October 1, 2025 the court allowed interim access to $500 million of new money and a $1.5 billion roll-up. On November 7, 2025 counsel to the ad hoc group announced that, after negotiations with the creditors' committee, Onset, the company and others, the court had approved the $4.4 billion facility including its 3:1 roll-up structure and related fees. The $4.4 billion combines the $1.1 billion of new money with the $3.3 billion roll-up; it was not $4.4 billion of new liquidity. ^{3 4 5}

analysisBy January 2026 the company's cash was running short. A press report of January 23, 2026, citing people familiar with the matter, said Oaktree Capital Management and Anchorage Capital had bought stakes in the $1.1 billion DIP loan, which traded at distressed levels while First Brands negotiated additional financing; the company had sought as much as $800 million of new money from creditors in December 2025 and said in early January 2026 that its funds would last only through the end of that month, and creditor advisers said new money required the approval of two-thirds of the existing DIP holders. The purchases are not documented in the retained court records. At a hearing on January 29, 2026 the court allowed First Brands to obtain short-term financing from Ford and General Motors, which were to prepay $48 million for parts over the following week so that businesses serving them, employing about 17,000 people in North America, could keep operating; earlier that month First Brands had said its cash on hand had fallen to $190 million despite borrowing $1.1 billion after filing. ^{6 7}

analysisSeveral parties sought outside control or dismissal early in the case. Raistone Capital LLC and Raistone Purchasing LLC – Series XXXII moved on October 8, 2025 for the appointment of an examiner (Bankr. Dkt. No. 307), and the U.S. Trustee did so on October 15, 2025. On October 30, 2025 Evolution Credit sought the appointment of a Chapter 11 trustee and the Carnaby senior secured lenders sought dismissal of certain debtors' cases, as did the Aequum senior secured lenders on November 10, 2025. The debtors also litigated with certain SPV lenders over whether the SPV debtors had to be administered separately from the rest of First Brands because they allegedly had separate assets and liabilities, including in Aequum Capital Financial II LLC's motion to dismiss (Bankr. Dkt. No. 631) and in an adversary proceeding brought by Evolution Credit Opportunity Master Fund II-B, L.P. against the debtors (Adv. Dkt. No. 3800). That separateness dispute is described in Patrick James's motion to dismiss the estate's suit against James, which cites these filings. ^{1 2}

analysisOn November 19, 2025 the court ordered the appointment of an examiner, whose mandate was to investigate First Brands' prepetition factoring transactions and the transfers and transactions related to its inventory financing arrangements. E. Martin De Luca, appointed in December 2025 in an appointment confirmed by Judge Christopher Lopez, worked on a budget set at $7 million and filed a redacted interim report on April 27, 2026, writing that the investigation had been paused because the court-approved budget was exhausted while significant work remained. The report's findings are allegations in an interim report, not court findings, and are described together with the estate's claims against insiders. On May 4, 2026 the examiner asked to raise the budget from a $7 million cap to $10 million. First Brands objected that at least $2 million of the increase reflected expenses already incurred above the approved budget although the examiner knew the ad hoc group did not consent to an increase, the ad hoc group also objected, and on June 18, 2026 the court denied the request. ^{1 2 3 4 5}

analysisBefore the petition the debtors had bought two directors' and officers' (D&O) insurance towers, an ABC policy and a Side A policy, each of $100 million made up of a $10 million primary policy and nine $10 million excess layers; the policies were issued to the non-debtor Mayfair Enterprises, LLC. On January 7, 2026 Judge Christopher Lopez ruled on the motion concerning these policies (Document 1231): the Side A policies and their proceeds are not property of the estate, so the automatic stay does not apply to them, while the debtors' interest in the proceeds of the ABC policy is estate property; the request to lift the stay for cause was denied without prejudice. ^{1 2}

analysisBecause of that order the Side A insurers had to drop down and pay defence costs of the litigation against the debtors' directors and officers. Edward James appealed the order, and on April 24, 2026 Senior U.S. District Judge Lee H. Rosenthal (S.D. Tex., Civil Actions H-26-513 and H-26-962) refused the motion of the Official Committee of Unsecured Creditors to dismiss the Side A insurers' appeal, noting that the insurers were in effect joining Edward James's appeal. ²

analysisThe docket of case 25-90399 lists adversary proceedings including Evolution Credit Opportunity Master Fund II-B, L.P. v. the entities listed on Schedule 1 (25-ap-03800, October 31, 2025); First Brands Group, LLC et al. v. sealed defendants (25-ap-03803, November 3, 2025); First Brands Group, LLC v. Onset Financial, Inc. et al. (26-ap-03005, January 9, 2026); Evolution v. First Brands Group, LLC et al. (26-ap-03006, January 9, 2026); Bank of America, N.A. et al. v. Aequum Capital Financial II LLC et al. (26-ap-03091, April 1, 2026); a suit by the UAW union against First Brands (26-ap-03143, April 29, 2026); Planters Bank v. Onset Financial (26-ap-03683, June 8, 2026); and GLAS Trust Company LLC, as administrative agent, v. Bank of America, N.A. et al. (26-ap-03592, July 28, 2026). The listing gives captions only, not the claims or their merits, and an adversary filed on February 13, 2026 by individual plaintiffs is not listed by name. ¹

analysisOne of these suits began outside the bankruptcy court. Planters Bank, whose parent is Planters Holding Company, Inc., sued Onset Financial, Inc. on June 8, 2026 in the U.S. District Court for the Eastern District of Louisiana (No. 2:26-cv-01230), attaching a master lease, master lease schedule 28, a UCC-1 financing statement and an assignment; its claims are allegations in a pending action. Onset moved to dismiss the complaint under Rules 12(b)(6) and 12(b)(1) or, in the alternative, to transfer it to another venue. On September 24, 2026 Judge Carl J. Barbier granted the motion as to the first claim, dismissing it without prejudice, and transferred claims two to six to the Southern District of Texas, where the action is pending as adversary proceeding 4:26-ap-03683 in the First Brands case. No ruling on the merits is recorded. ²

analysisOther parties appear on the case docket in their own right. Mayfair Enterprises, LLC is listed as a creditor represented by its own counsel. The interested parties include the Carnaby II and III secured parties, Leucadia Asset Management LLC and the LAM TFG, LAM TFG I SPV and LAM TFG II entities, Banco Actinver as trustee of an irrevocable management trust, and Patrick James, represented by Quinn Emanuel Urquhart & Sullivan, LLP. Former First Brands executives appear separately as interested parties with their own counsel, among them Michael Baker, Edward James, Stephen Graham, Peter Andrew Brumbergs and Shekhar Kumar; Jefferies Financial Group Inc. and Deva Capital Investment Company, S.L.U. are also listed as interested parties. ¹

analysisIn June 2026 the U.S. government was reported to have asserted a $286 million claim against First Brands in the bankruptcy, alleging that the company had underpaid tariffs for years. The claim is known from press reports; no determination of it and no response by the company were found in the retained record. That month the Pension Benefit Guaranty Corporation took three First Brands pension plans covering 1,630 current and future retirees into its trusteeship: the plan for bargaining-unit employees of the FRAM plants in Fostoria and Greenville, the plan for Cardone Industries Inc. union employees and the Dalton Corporation Warsaw Manufacturing Facility pension plan. ^{1 2}