đ„T-Bonedđ„
First Brands Group LLC Crashes into BK, Beyond Meat Inc. ($BYND), CommScope Holding Company Inc. ($COMM) + More
đNew Chapter 11 Bankruptcy Filing - First Brands Group LLCđ
Surely, you saw. It was f*cking everywhere.
Heck, a good bunch of yâall are probably working on the sh*tshow: there were 380+ folks dialed into the October 1, 2025 first-day hearing, and Judge Lopez had to ask office-bound desk jockeys to huddle up together in conference rooms to make room for others to dial in.
In any event, after a tumultuous few weeks, on September 28, 2025, Cleveland-based First Brands Group LLC (âFirst Brandsâ) and 98 affiliates (collectively, together with First Brands, the â9/28 debtorsâ) slammed hard into chapter 11 in the Southern District of Texas,* joining 13 affiliated companies (the âinitial debtorsâ and, together with the 9/28 debtors, the âdebtorsâ and, together with their non-debtor affiliates, the âcompanyâ) which had filed earlier in the week on September 24, 2025.
We first mentioned First Brands back in September** when Fox Rothschild LLP (âFox Rothschildâ) inadvertently sh*t the bed and disclosed a bunch of confidential info regarding the companyâs dispute with fellow automotive supplier and chapter 11 debtor Marelli Holdings Co. Ltd. (âMarelliâ).
But for a mountain of (good) reasons, Fox Rothschild ainât debtorsâ counsel on the $6.1b bankruptcy. Or is it $9.3b? ⊠or $11.6b?
Depends on whether youâre going off purely funded debt (#1) or including âoff balance sheetâ SPV arrangements and supply chain financing (#2) or tacking on the companyâs factoring liabilities (#3). Regardless sorry Fox-y, whichever debt load, itâs clearly a job for heavier hitters. In this case, Weil Gotshal & Manges LLP (âWeilâ),*** Lazard Freres & Co. ($LAZ), and Marelliâs own financial advisor Alvarez & Marsal LLC (âA&Mâ).
For reference, hereâs Weilâs ginned-up debt chart:
⊠which omits 100% of the companyâs factoring liabilities.
Anyway, hereâs A&Mâs Charles Moore, the debtorsâ CRO and first day declarant, to tell us the rest of the story for the filing:
â ⊠several factors have contributed to the commencement of these chapter 11 cases, including significant liabilities related to (i) tariffs [and] (ii) capital expenditures related to both the Companyâs acquisitions and integration costs ...â
But are ya sure thatâs all, Mr. Moore? Because âŠ
⊠and we couldnât help but notice you peppered in some incredibly couched phrasing (emphasis added):
âAccording to the Companyâs audited consolidated financial statements for the year ended 2024, total net sales were approximately $5 billion.â
âOver the past 12 months, based on the Companyâs estimates, approximately 82% of the Companyâs revenue has been derived from sales of aftermarket parts, 13% from sales to OEMs, and approximately 5% from sales to specialty and industrial customers.â
âThe Companyâs estimates indicate approximately 75% of the Companyâs revenue is generated by the sale of products sourced from North America, while the remaining 25% is generated by the sale of products sourced from outside North America.â
âAs of the Petition Date, according to the Companyâs financial statements, the Company was levered approximately 5 times based on total on-balance sheet funded debt of $6.1 billion and reported EBITDA of $1.133 billion.â
And thereâs, um, this:
Clearly, the debtorsâ advisers donât trust in the companyâs books and records. Not that we will blame them after they found $2.3b in â⊠Third-Party Factoring irregularities âŠâ and collateral âmayâ have been commingled and double-counted across separate, siloed facilities.**** Certainly smells like more than just a regular-way âirregularity,â but weâre sure itâs just a mixup, đ.
Okay. Sarcasm aside, thereâs a đŻ% chance owner Patrick James, who also serves as the debtorsâ CEO, will find himself in the hot seat as these cases play out.*****
The debtorsâ downfall was jumpstarted after an ill-fated June â25 refinancing process led by then-banker Jefferies Finance LLC ($JEF). It didnât get very far though because, in August â25, potential lenders had already been spooked âŠ
⊠and requested a quality of earnings report (which is reportedly due sometime this month).
Then September rolled around and sh*t hit the fan pretty damn quick ⊠here is the debt pricing as of September 23, 2025 âŠ
⊠and here it is as of September 27, 2025 âŠ
⊠all of which took place after lenders started sending termination notices, Southstate Bank nabbed $27mm â the debtorsâ â⊠last remaining liquidity âŠâ â from an account maintained with the bank to set off debts owing to it, and Apollo Global Management Inc. ($APO) (âApolloâ) and Diameter Capital Partners (âDiameterâ) closed out shorts on the companyâs loans, which included, LOL, Apollo savvily sidestepping the credit agreementsâ DQ lists by using a bank to front the trade, đ„.******
And while Apollo and Diameter probably raked in cash, others lost a sh*tload ⊠we mean ⊠just take a look at those đdebt prices ⊠that sh*t collapsed fast ⊠and hard ⊠IN ⊠A ⊠WEEK.*******
Hahahahaha, better luck next time, Millennium Management.
In any event, any fallout from the âŹïž or Mr. Jamesâ âleadershipâ will come at a later date. Because notwithstanding one two three four five SIX SEVEN EIGHT first-day DIP and cash management objections and blunt threats to seek dismissal of cases or the appointment of a chapter 11 trustee or examiner, Judge Lopez wasnât interested at all in doing anything other than ramrodding through a to-be-syndicated $4.4b DIP term loan backstopped by âcertainâ members of an ad hoc group of 1L and 2L crossholders******** and approving â and overruling all objections to â the other first-day relief.********* The DIP is comprised of (i) $1.1b in new money (technically $500mm interim, but $325mm is funded into escrow) and (ii) a 3:1 bifurcated âcreepingâ roll-up of the 1L term loans ($1.5b interim, $1.8b final). The new-money DIP bears interest at SOFR + 10%, of which 1.55% is cash-pay and the balance PIK,********** and features a 5% PIK new-money upfront fee, a 10% new-money backstop âanchorâ premium, and a 5% exit premium.***********
After an hour of delay âŠ