first brands risk memo (rolling)

published: October 8, 2025 updated: October 9, 2025 •
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-## executive summary (as of 2025-10-09)

  • chapter 11 filed in s.d. texas with lead case 25‑90399; spv financings failed first (2025‑09‑24), followed by operating entities (2025‑09‑28/29); interim dip of $1.1b approved with roll‑up mechanics. reuters via investing.com, dip interim approval
  • doj inquiry: on 2025-10-09, the u.s. attorney’s office for the southern district of new york opened a fact-finding inquiry into the company’s collapse. the probe follows a motion from a creditor, raistone capital, alleging that as much as $2.3b in collateral may be missing and requesting an independent examiner. the ft also reports that two independent directors are conducting a parallel investigation. reuters, ft
  • raistone capital warned in a 2025-10-08 motion that as much as $2.3b in collateral may be missing and asked the court to appoint an independent examiner. reuters
  • financial times reports first brands appointed two independent directors to scrutinize its off-balance-sheet funding and told the court only $12m of cash remained as of early october, highlighting liquidity stress. financial times
  • liabilities (on + off balance sheet) exceed $11b per reporting; investigations focus on double‑financed receivables and commingled inventory collateral. gtr — exposure tally, gtr — investigation, sfnet
  • exposure concentration in: dip/ad‑hoc lenders; term‑loan + clo/bdc holders; abl/inventory lenders; scf/factoring funders; depositary setoff; trade/employee claims. reuters, ft, gtr

facts

bankruptcy case details

  • Lead Case: First Brands Group, LLC — Case No. 25‑90399 (Bankr. S.D. Tex., Houston Division)
  • Judge: Hon. Christopher M. Lopez
  • Filing Date: September 28, 2025 (second wave); initial SPV filings September 24, 2025
  • Joint Administration: All 111 affiliated entities administered under lead case
  • Total Documents: 558 across all cases (542 in lead docket as of 2025-10-08)
  • PACER: Lead Case Docket

estimated consolidated financial position

Per voluntary petition disclosures for all 111 affiliated debtors:

  • Assets: 1,000,000,001−1,000,000,001 - 10,000,000,000
  • Liabilities: 10,000,000,001−10,000,000,001 - 50,000,000,000
  • Estimated Creditors: 25,001 - 50,000
  • Available Funds: Petitions indicate “funds will be available for distribution to unsecured creditors”

liquidity and oversight disclosures

  • 2025-10-09 hearing: Debtor counsel told the court only $12m of cash was available, underscoring tight liquidity. financial times
  • independent director review: Two independent directors were appointed to scrutinize off-balance-sheet financing arrangements ahead of potential examiner involvement. financial times

debt and financing structure

  • DIP Financing: $1.1B facility (part of $4.4B total rescue package; interim access ~$500M approved), provided by ad‑hoc group of cross-holders. Publicly confirmed participants include Redwood Capital Management, UBS Asset Management, Beach Point Capital Management, and Diameter Capital Partners; Gibson Dunn represents an ad hoc group with “dozens of firms.” Includes roll-up of certain prepetition claims. Bloomberg, Reuters
  • Secured Term Loans: First/second‑lien ~$5.5B; held by CLOs, BDCs, and institutional lenders
  • ABL: ~$226.9M drawn/letters of credit (Bank of America as agent)
  • Inventory/Equipment Financing: Onset Financial ($1.9B), Evolution Credit Partners ($230M), Aequum (~$45M). SFNet
  • Supply Chain Finance/Factoring: UBS Hedge Fund Solutions ($233.7M largest unsecured), Trade Finance Company ($208.3M), 1977 O’Connor ($116.1M), CIT/First Citizens ($84.4M), Wafra ($38M), Pemberton ($36.3M), Orbian ($20M), LiquidX ($71M incl. Fasanara $24M); Raistone cited as contact for ~$667M across six exposures. GTR
  • Point Bonita/Jefferies: ~$715M trade‑finance assets. Reuters

See exposures dataset for comprehensive creditor breakdown.

investigations and regulatory activity

  • 2025-10-09 — doj inquiry: The U.S. Attorney’s Office for the Southern District of New York opened an inquiry into the collapse of First Brands. Described as a “fact-finding mission,” the probe follows creditor allegations of missing collateral, with one lender claiming up to $2.3 billion has “simply vanished.” The inquiry is expected to scrutinize the company’s off-balance-sheet financing structures. The case has drawn in major financial players, including Jefferies, UBS, and Millennium Management. reuters, ft
  • uk regulator monitoring: The UK Financial Conduct Authority is monitoring potential spillovers to supply-chain finance platforms amid concerns about tightened credit following First Brands’ collapse. fnlondon

governance and control structure

Special Committee of Independent Managers

  • Formed: September 17, 2025
  • Members:
    • Neal Goldman (Independent Manager)
    • William Transier (Independent Manager)
  • Authority: Recommend bankruptcy filing, oversee restructuring process, independent from management and equity holders

Board of Managers (First Brands Group Holdings, LLC and affiliates)

  • Patrick James
  • Shekhar Kumar
  • Stephen Graham
  • Neal Goldman (Independent)
  • William Transier (Independent)

Chief Restructuring Officer

  • Name: Charles M. Moore
  • Appointed: September 26, 2025
  • Provider: Alvarez & Marsal North America, LLC
  • Authority:
    • Cash management and disbursements
    • Operational expenditure approval
    • Debt incurrence decisions
    • Day-to-day restructuring management
  • Note: All Chapter 11 petitions signed by Charles M. Moore as CRO (centralized filing control)

Professional Advisors (see sources page for details):

  • Bankruptcy Counsel: Weil, Gotshal & Manges LLP (Clifford W. Carlson, Matthew S. Barr)
  • Financial Advisor: Alvarez & Marsal North America, LLC
  • Investment Banker: Lazard Frères & Co.
  • Claims Agent: Kroll Restructuring Administration LLC
  • Strategic Communications: C Street Advisory Group

assumptions (explicit)

  • media figures are treated as directional pending docket extractions (top‑30 list, creditor matrix, first‑day declarations). press release (syndicated)
  • ubs exposures split to avoid double count: ubs hedge fund solutions ($349.8m unsecured scf) vs ubs asset management ($160m incl. secured/dip participation). finews, sharecafe
  • evolution classification (inventory vs factoring) to be verified against collateral schedules. sfnet

implications

  • recovery dispersion: dip roll‑up + potential collateral defects imply wide outcome variance across dip, term‑loan tranches, inventory lenders, and unsecured scf/factoring. wsj, sfnet
  • duration risk: collateral/ownership disputes could elongate the case and depress aggregate recoveries. gtr
  • private credit spillovers: clo/bdc marks likely reflect step‑downs in q3/q4 2025 for holders with meaningful exposure. alt coverage, gecc mirror

key risks and variant views

  • collateral validity: if defects are limited, secured recoveries stabilize; if widespread, unsecured recoveries likely severely impaired with litigation overhang. gtr
  • dip governance: roll‑up and milestones may accelerate a sale/recap but invite challenges from other creditor groups. wsj
  • operational continuity: dip provides runway, but working‑capital channels (scf/factoring/inventory finance) under dispute may disrupt supply. gtr, ft

references (selected)

see also: sources & dockets. this memo is updated as new, credible filings or reports appear.

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