First Brands Group’s collapse escalated this week as creditor Raistone alleged up to $2.3 billion has “simply vanished,” and the Department of Justice opened an inquiry, all just a few weeks after the company entered Chapter 11 in late September with about $11.6 billion in liabilities.
In an Oct. 2 email, First Brands’ counsel Sunny Singh responded to questions about $1.9 billion of factored receivables with “#1 — We don’t know” and “#2 — $0,” while in court he said the segregated accounts held “zero dollars” and “It’s not here. We don’t have it,” adding “There’s $12 million in the bank account today. That’s it.”
Contagion to financiers is now quantified with Jefferies saying a Leucadia Asset Management fund holds $715 million of First Brands receivables and reported payments to that fund stopped on Sept. 15. UBS is also assessing more than $500 million in exposure tied to the company.
Court papers detail the capital stack driving the restructuring: $6.1 billion on-balance-sheet funded debt, $2.3 billion of off-balance-sheet financing via SPVs, $800 million in unsecured supply-chain finance liabilities, and $2.3 billion in factoring liabilities. The debtors obtained $1.1 billion in DIP financing with $500 million immediate availability to stabilize operations.
On remedies, Raistone moved for an independent examiner request to the Texas bankruptcy court. Hearing on the motion is set for Nov. 17.
First Brands traces to Patrick James’s Crowne Group, which bought Trico Products in 2014, then expanded in 2019 when Trico acquired Fram Group. In 2020, Trico rebranded as First Brands Group after adding Brake Parts Inc. and Champion Laboratories, and completed the purchase of Horizon Global in 2023. The company and affiliates then filed Chapter 11 in the Southern District of Texas in September 2025.
The mechanics under scrutiny involve First Brands acting as servicer on receivables sold to multiple finance vehicles, controlling payment flows from retailers such as Walmart and AutoZone. Reporting suggests duplicate claims against the same invoices may have occurred, leaving lenders exposed if collateral isn’t there.
The DOJ has reportedly opened an early-stage inquiry with the probe led by the US Attorney’s Office for the Southern District of New York.
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