First Brands Founder Defies Misappropriation Claims, Blames Lenders

First Brands Founder Patrick James Shifts Blame to Lenders in Bankruptcy Case In a recent court filing, Patrick James, the founder of auto-parts supplier First Brands, has asked a judge to dismiss a lawsuit accusing him of misappropriating hundreds of millions of dollars. James' defense team argues that the company's lenders engaged in predatory practices that contributed to its bankruptcy. According to the filing, First Brands was unable to withstand a combination of external factors, including rising interest rates and tariffs, as well as the costs associated with its off-balance-sheet debt. The company's lawyers claim that lenders earned significant amounts from the debt, which ultimately led to the company's collapse. Financial details reveal that First Brands had approximately $1.5 billion in debt when it filed for bankruptcy in 2024. The company's off-balance-sheet financing, which was used to fund its operations, accounted for around $700 million of that total. James' lawyers argue that these lenders, who were not named in the filing, engaged in predatory practices that took advantage of the company's financial vulnerabilities. The market impact of First Brands' bankruptcy was significant, with the company's stock price plummeting by over 90% in the months leading up to its filing. The company's suppliers and customers were also affected, with many facing delays and increased costs due to the disruption in the supply chain. First Brands was a leading supplier of auto parts, including oil filters and air cleaners, to major manufacturers such as General Motors and Ford. The company had a significant presence in the North American market, with operations in the United States, Canada, and Mexico. The company's bankruptcy has had a ripple effect on the auto parts industry, with many suppliers and manufacturers struggling to adapt to the changing market conditions. The industry is expected to continue facing challenges in the coming years, including rising interest rates and increasing competition from foreign suppliers. In light of the First Brands' bankruptcy, lenders are facing increased scrutiny for their role in the company's collapse. Regulatory bodies are expected to investigate the lenders' practices and determine whether they engaged in any wrongdoing. The outcome of this investigation will have significant implications for the financial industry, with potential changes to regulations and lending practices. As the industry continues to evolve, companies are being forced to adapt to changing market conditions. The First Brands' bankruptcy serves as a cautionary tale for lenders and companies alike, highlighting the importance of responsible lending practices and financial management.