‘It’s Game Over’—First Brands Tells Court It Will Shut Down Without $600M Lifeline

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On November 6, 2025, First Brands Group told a Houston court it would shut down without $600 million in emergency financing, a risk to auto-parts supply and 26,000 jobs. The First Brands Group bankruptcy case drew challenges as creditors alleged double‑pledged assets and sought to block emergency financing. Key retailers including AutoZone, O’Reilly, NAPA, and Walmart faced exposure as the auto parts supplier battled disputed claims and lender fights.
Court filings cited $172 million in direct losses, billions at risk across factoring, and a Justice Department probe into invoice sales. Founder Patrick James resigned amid fraud claims; interim CEO Charles Moore installed controls and an independent board investigation. Judge Lopez later approved a $600 million lifeline to stabilize operations under tighter oversight.

Transcript

00:00It's game over. First Brands tells Court it will shut down without $600 million lifeline.

00:07On November 6, 2025, First Brands Group, a major auto parts supplier, warned a Houston

00:12Court it would shut down without $600 million in emergency funds. Supplying one-third of

00:19break-and-filter parts to retailers, including AutoZone and Walmart, a failure would put

00:2426,000 jobs worldwide at risk. Wall Street reacted sharply to First Brands' plea.

00:31Creditors alleged the company had pledged the same inventory and equipment to multiple lenders,

00:36potentially breaching agreements. Onset Financial owed $1.9 billion, attempted to block new loans,

00:43while $230 million in disputed claims complicated any bailout. Founder Patrick James expanded First

00:49Brands through 24 acquisitions since 2013, consolidating brands like Fram, Rebestos,

00:56Trico, and Autolite. Revenue grew from $1.6 billion to $5 billion by 2024, but debt surged,

01:05leading to a bankruptcy filing on September 28, 2025. Efforts to refinance $6.2 billion in July 2025

01:13failed. Lenders flagged revenue overstatements, complex side deals, and a tangled debt structure.

01:20Onset Financial declared $1.9 billion in default, while South State Bank recovered only $27 million

01:26in remaining funds. Attorney Sonny Singh warned Judge Lopez that without court approval of $600 million,

01:33First Brands would liquidate immediately, halting operations and leaving retailers and consumers

01:38without vital auto parts. Major chains including AutoZone, O'Reilly Auto Parts, Napa, and Walmart faced

01:45exposure. O'Reilly shares fell over 7%. Jeffrey's Point Bonita fund had $715 million in unpaid invoices.

01:55Raystone lost half its staff as 80% of its business collapsed overnight. Court records show $172 million

02:02in direct losses, with $684 million at risk. Jeffrey's fund dropped 18% amid First Brands' financial

02:09failure. Banks faced substantial losses. UBS $500 million, Mizuho and Sumitomo Mitsui $1.75 billion.

02:20JP Morgan and others reviewed lending controls to prevent repeat risks. First Brands owed $3 billion

02:26across factoring and other liabilities. Weak reporting and double-pledged invoices drew comparisons

02:32to Greensill Capital, prompting calls for stricter oversight. Investigators allege invoices were sold

02:39multiple times, generating billions in fictitious assets and triggering a Justice Department probe.

02:45Lenders battled in court over missing collateral. Some demanded an independent trustee,

02:50others defended a risky bailout. Founder James resigned amid fraud claims.

02:55Interim CEO, Charles Moore replaced managers, instituted financial controls and launched

03:01an independent board investigation. James faces lawsuits over extravagant spending and moving

03:07$700 million to private accounts. The DOJ is investigating, and a court-appointed examiner

03:13may follow. Judge Lopez approved the $600 million lifeline. Moore aims to stabilize operations,

03:19but fraud-related complications may limit the company's valuation and require stricter financial

03:24oversight.

‘It’s Game Over’—First Brands Tells Court It Will Shut Down Without $600M Lifeline

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