Day: November 4, 2025

• New management for the bankrupt auto parts supplier is suing its founder, Patrick James.
• The suit claims James fraudulently secured billions in financing and then enriched himself.
• The suit references ‘exotic’ cars, a celebrity chef, and homes from New York to California.

Seventeen “exotic” cars. “Lavish” homes from New York to California. A private “celebrity chef.”

These are just some of the big spending allegations that have emerged in a lawsuit filed this week against Patrick James, the founder of auto parts supplier First Brands, which filed for Chapter 11 bankruptcy protection in September.

The lawsuit, filed by First Brands’ new management, said James “misrepresented First Brands’ financial position to secure billions in debt financing” over the years. The company’s founder then “secretly pilfered some of the company’s assets to fund his and his family’s lavish lifestyle,” said the lawsuit filed by Weil Goyshal lawyers in the southern district of Texas bankruptcy court.

First Brands’ bankruptcy filing last month followed the implosion of auto lender TriColor, prompting Wall Street titan Jamie Dimon to question what other corporate “cockroaches” lurk beneath the surface of an otherwise healthy economy.

A spokesman for James said he plans to challenge the allegations, which he denied. “Mr. James has always conducted himself ethically and is committed to doing everything he can to support First Brands’ stakeholders during the restructuring process,” the spokesman said in an emailed statement.

The lawsuit said James used company funds “to pay for or otherwise maintain” his lavish lifestyle, including:

• Seven properties and “an extensive car collection, including at least seventeen exotic cars.”
• Some $3 million from First Brands accounts toward rent payments for James’s New York City townhouse between 2019 and 2024.
• Over $2 million from First Brands’ accounts in 2025 for payroll to James’s personal family office.
• Approximately $500,000 from First Brands accounts in 2024 “to Mr. James’ private celebrity chef.”
• $150,000 for a celebrity personal trainer through Battery Park Holdings LLC.

• $110,000 reimbursed by First Brands to Battery Park for a six-week Southampton hotel stay for two non-employees in August 2023.
• Millions to entities James controlled in the months leading up to his purchase of luxury homes in the Hamptons, NY, and Malibu, California.
• About $8 million from First Brands to James’ son-in-law’s “wellness” company, Archive Health LLC, between 2021 and 2025.

James’ spokesman said the money that went to Archive Health was for “legitimate expenses associated with the company’s role providing health clinic services to approximately 7,000 families of First Brands factory employees in both the US and Mexico.”

The lawsuit also said some $700 million was transferred from First Brands to Patrick James or entities he controlled between 2018 and 2025, including over $600 million to the Patrick James Trust “for no consideration and for no valid business purpose.”

The Rochester, Michigan-based company has asked the court to freeze James’ assets.

The new lawsuit also accused James of misrepresenting the company’s finances to secure debt financing. It said James caused First Brands to incur, “at least $2.3 billion in accounts receivable factoring liabilities based, at least in significant part, on non-existent or doctored invoices.”

It also said he allowed the company to double-pledge collateral tied to another $2.3 billion in financing involving a special purpose vehicle, the lawsuit said.