--- title: "Onset Financial: lessor to the Carnaby vehicles and largest creditor" language: en canonical: https://dossiertwist.com/dossiers/first-brands-group/onset-financial/ as_of: 2026-10-15 keywords: ["First Brands Group","Patrick James","Edward James","First Brands Group Holdings","Viceroy Private Capital","Carnaby Capital Holdings","Onset Financial","Point Bonita Capital","Jefferies","Raistone","Katsumi Global","Horizon Global","Brake Parts Inc","Ultinon","Trico","FRAM","Chapter 11","receivables factoring","off-balance-sheet financing","supply chain finance"] --- # Onset Financial: lessor to the Carnaby vehicles and largest creditor **Question.** What was Onset Financial's role in financing First Brands, and what do the suits against Onset allege? **Answer.** Onset Financial, Inc. financed First Brands through master leases with two special purpose vehicles held under Viceroy Private Capital, LLC, Carnaby Inventory IV (from June 28, 2022) and Carnaby FA (from October 24, 2023), guaranteed by First Brands Group Holdings and other parent companies. After missed payments in May and June 2025 and three forbearances, Onset gave notice of default on September 9, 2025; about $1.9 billion was outstanding under the leases at the petition date. The debtors and a creditor group sued Onset and Edward James in January 2026; Onset denies wrongdoing and says it was deceived like other lenders, and the debtors' suit has been stayed. ## The master leases - Analysis: Onset Financial, Inc. dealt not with First Brands Group, LLC directly but with special purpose vehicles (SPVs) that the debtors describe as subsidiaries of Viceroy Private Capital, LLC and Carnaby Capital Holdings, LLC; they are not subsidiaries of First Brands Group, LLC and not obligors under its term loans or asset-based lending (ABL) facility. Carnaby Inventory IV, LLC signed Master Lease Agreement No. OFI1445416 with Onset on June 28, 2022, and Carnaby FA, LLC signed Master Lease Agreement No. OFI1545465 on October 24, 2023. First Brands Group Holdings, LLC, Viceroy Private Capital, LLC, Carnaby Capital Holdings, LLC and other Carnaby companies guaranteed both leases; the Carnaby FA lease was also guaranteed by Eagle Casting Holdings, LLC and Eagle Casting, LLC, which also guarantees the senior credit facilities. [src-001] - Analysis: Under the leases Onset lends funds to Carnaby Inventory IV to acquire inventory or equipment from First Brands Group, LLC on Onset's behalf; the goods are leased back to Carnaby IV and may ultimately be repurchased by First Brands. The debtors said they believe the master leases may not be true leases and reserved the right to have them recharacterised as financings. Including interest, fees and forbearance fees, about $1.9 billion was outstanding under the master leases and related forbearances at the petition date, and the group's annual debt service of more than $900 million was stated before counting any obligations under the Onset master leases. [src-001] ## Missed payments, forbearances and default - Analysis: Carnaby Inventory IV and Carnaby FA failed to make monthly payments of about $208 million due on May 1, 2025 and entered a first forbearance with Onset that day, extending the deadline to May 30, 2025 in exchange for late and forbearance fees of about $35 million. After they also missed June payments of $198.5 million, a second forbearance of June 1, 2025 extended the deadlines to June 27 and July 27, 2025 for fees of about $73.5 million and an additional monthly payment of about $223 million. A third forbearance of June 30, 2025 restructured the schedules to total payments of $1.9 billion, about $380 million more than was due before the first forbearance: $20 million by July 3, 2025, which was paid, $570 million on August 29, 2025, monthly payments through August 20, 2026 and a $645 million balloon payment on August 31, 2026. In connection with it Viceroy Private Capital, LLC pledged 15% of its membership interests in First Brands Group Holdings, LLC to Onset. When the $570 million payment was missed, Onset delivered a notice of default and acceleration on September 9, 2025. [src-001] - Analysis: In the Chapter 11 case Onset appears among the creditors on the docket and took part, with the creditors' committee, the company and others, in the negotiations that preceded the court's November 7, 2025 approval of the debtor-in-possession (DIP) financing, $1.1 billion of new money with a $3.3 billion roll-up of earlier loans. Patrick James's lawyers, in arguments the court has not ruled on, said Onset charged onerous fees, that its guaranty from Viceroy Private Capital was "more consistent with a commercial payday loan" than with equipment lending, and that the "predatory practices" of such lenders drove the company into default; the debtors' own first-day declaration also names lease obligations, particularly to Onset, alongside tariffs and mounting debt among the causes of the liquidity crisis. [src-040] [src-035] [src-074] [src-025] [src-026] [src-049] [src-001] ## Suits against Onset - Analysis: In January 2026 Onset became a defendant. On January 5, 2026 a group of First Brands creditors accused Onset of "pillaging" the company through usurious financing arrangements approved by Edward James, alleging that Onset in return agreed to pay Edward James hundreds of millions of dollars through additional fees and a right to invest personally in the financings. On January 9, 2026 First Brands sued Onset and Edward James, alleging that they conspired "to defraud creditors out of billions of dollars and property"; the complaint says Onset and Edward James obtained over $2.3 billion in payments and that First Brands had also transferred more than $600 million in cash to Onset as of September, about $2.9 billion in total. Neither suit's allegations have been adjudicated, and by June 2026 the debtors' suit had been stayed pending resolution of the criminal charges against Patrick James. Onset denied wrongdoing, blamed the James brothers for the collapse and called the debtors' claims a "desperate attempt to blame a victim for doing business in good faith"; after the plan was rejected in August 2026 an Onset spokesperson said the ruling showed the allegations against Onset "wholly lack merit". [src-084] [src-070] [src-039] - Analysis: In a motion to dismiss the debtors' suit, reported in March 2026, Onset said it had funded nearly $3 billion to First Brands from 2018 to 2025, secured by inventory and equipment, that it was still owed at least $2.17 billion at the Chapter 11 filing, and that it and its funding partners, like other lenders, had been deceived by falsified inventory schedules, fake account documentation and collateral that was often double- or triple-pledged to different lenders. That is Onset's own account in pending litigation, where the debtors allege the opposite and no claim has been adjudicated. [src-121] [src-084] - Analysis: The debtors' retained expert, Marc S. Kirschner, said in a July 2026 report filed in support of the plan, as reported in the press, that Onset lent more than $2 billion through Carnaby FA under a structure in which the SPV bought inventory or equipment from a First Brands company, sold it to Onset and leased it back, that the facility could not operate as papered because the SPV had to buy and replace inventory and service debt to Onset at interest rates of up to about 200%, and that Onset should have known this was impossible; the triple-digit rates, the expert said, would be substantial evidence that the transactions were made for inadequate consideration. These are unadjudicated opinions. Onset denies wrongdoing and calls itself a victim that did business in good faith; no response by Edward James to the expert's statements was found, and Edward James pleaded not guilty in the criminal case on February 4, 2026. In August 2026 the court found the plan, which relied on these litigation claims, not feasible and ordered the cases into Chapter 7 liquidation. [src-085] [src-084] [src-066] [src-070] - Analysis: Separately, the estate's suit against Patrick James alleges that of more than $1 billion of financing First Brands received from Onset between April 2024 and March 2025, over approximately $200 million went to Patrick James or James's affiliated entities, for example about $17 million paid to the Patrick James Trust on April 4, 2025, the day Carnaby FA received $67.2 million from Onset. These allegations have not been adjudicated; Patrick James's motion to dismiss says the complaint gives no date, time or transferor for that $200 million. [src-003] [src-026] - Analysis: The debtors' June 8, 2026 liquidating plan proposed to place the claims against Onset, which the debtors say involve more than $2 billion of alleged fraudulent transfers, in a litigation trust, and the debtors' July 2026 filings named Onset among third-party financiers against which more than $25 billion was potentially available, an estimate of a potential claim universe rather than a valuation. Onset objected to the plan. By June 2026 the debtors' suits against Onset and against Patrick James, together seeking more than $2.7 billion, were stayed pending resolution of the criminal charges against Patrick James. The court refused to confirm the plan on August 24, 2026 without assessing the merits of these claims and converted the remaining cases to Chapter 7 on September 1, 2026; an Onset spokesperson said the rejection of the plan was another sign that the debtors' allegations against Onset lacked merit. Patrick James has denied the fraud allegations. [src-061] [src-025] [src-070] [src-039] - Analysis: A separate dispute concerns one lease schedule. Planters Bank, whose parent is Planters Holding Company, Inc., sued Onset 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. Onset moved to dismiss the complaint under Rules 12(b)(6) and 12(b)(1) or, in the alternative, to transfer it; on September 24, 2026 Judge Carl J. Barbier dismissed the first claim 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. 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