First Brands Bankruptcy: What’s Happening in 2026?

First Brands Bankruptcy 2026 update: what’s new (so far) 

In the first week of January 2026, reporting across four major outlets converged on the same theme: the case is shifting from “messy restructuring” to “restructuring plus investigations,” with liquidity getting tight fast and creditor scrutiny escalating. 

Bloomberg Law (Jan 6, 2026): “Kickbacks” claim tied to high-return financing 

Bloomberg Law focuses on a court filing in which creditors allege Onset Financial and Edward James (brother of founder Patrick James) were involved in a kickback scheme tied to financing arrangements described as “usurious,” with creditors claiming Onset advanced no more than $2.5B, has already received about $2.9B, and is still asserting $1.9B more in bankruptcy claims. The allegation, if litigated successfully, could reshape who gets paid and in what order, because it goes straight at transaction validity, insider conduct, and potential clawback theories. Read more at Bloomberg Law.

Reuters (Jan 7, 2026): Cash runway is shrinking and the court wants an examiner-led probe 

Reuters reports First Brands had about $190M remaining from an initial $1.1B bankruptcy borrowing, and counsel warned that amount may only keep the business operating through the end of January 2026. The company is pursuing additional financing and moving toward asset sales on a compressed timeline, while also trying to investigate alleged fraud tied to invoice-related transactions. Reuters also notes the company has accused former CEO Patrick James of creating at least $2.3B in liabilities via alleged misconduct involving invoice sales, and that the judge appointed an independent examiner to investigate, with the court signaling it wants the examiner (not creditor skirmishing) to control the new investigative threads for now. Read more at Reuters. 

Wall Street Journal (Jan 7, 2026): The “usurious deals” narrative goes mainstream 

The WSJ similarly reports creditors’ allegations that a Utah equipment financier (identified as Onset Financial) made short-term loans with extremely high economics (reported as over 300% returns) tied to an alleged kickback arrangement involving Edward James, a former First Brands executive. The WSJ piece also highlights the broader stakes: lenders and prosecutors are now circling the case, and the company’s near-term outlook depends heavily on fresh financing or asset sales to avoid a deeper wind-down scenario. Read More at Wall Street Journal.

FAQ 

Is First Brands “out of cash” already?
Not yet, but Reuters reports the company warned it could be down to a runway that only sustains operations through late January 2026 without more financing or sales.  

What does it mean when creditors hire an investigations firm?
It usually means creditors want independent capability to trace transactions, understand who benefited, and identify potential claims that could increase estate value (or challenge other parties’ claims).  

What is an “independent examiner,” and why does it matter?
An examiner is a court-appointed investigator who can review facts and report to the court. In a fraud-heavy case, that report can shape settlement leverage, litigation targets, and the overall direction of the restructuring.  

What happens next if the company can’t secure more financing?
Based on what Reuters and the WSJ describe, the near-term path would likely involve accelerated asset sales, and potentially a broader wind-down if a going-concern solution can’t be financed.  

Conclusion

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Disclaimer:

This blog post is meant to be informative and provide helpful tips and insights into credit insurance policies.  It is not meant to supersede any policy requirements.  Please consult your credit insurance policy for all requirements including claim filing deadlines and required documentation.

Since 2004, Securitas Global Risk Solutions, LLC (“Securitas”) has helped clients develop credit and political risk transfer solutions that provide value on numerous levels. As an independent trade credit and political risk insurance brokerage, Securitas is focused on developing comprehensive solutions that meet the needs of clients, ensuring a complete understanding of policy wording and delivering excellent responsive service.