Part 1 examined the destruction of First Brands, the Cleveland auto parts maker, and the indictment of its founder, Patrick James.
Part 2 examined the federal prosecution in Manhattan and the cooperators, Stephen Graham and Peter Andrew Brumbergs, the two men who have pleaded guilty to carrying out the financial fraud and on whom the government's case rests.
Part 3 examined Apollo Global Management, the trillion-dollar investment company that purchased two auto parts competitor companies, then took a market position to profit if First Brands failed to pay its debt.
Part 4 examined Apollo's Wall Street credit default bet against First Brands and the conflict of having the chairman of Apollo's board of directors, Jay Clayton, resign to become the U.S. Attorney prosecuting Patrick James.
Part 5 described the financial fraud committed at First Brands by its chief financial officer, Graham, and its vice president of finance, Brumbergs: fabricated invoices, the same bill sold twice, the shell companies that held hidden debt, and the court-appointed examiner who reviewed 13.5 million documents and did not find Patrick James's hand in any of it.
Part 6 examined the many men who profited from the collapse of First Brands, and the one man charged with causing it: Patrick James.
Part 7.
What the Estate Says It Can Collect
A company in bankruptcy has an estate just like a dead person has an estate.
A report filed this month in the First Brands bankruptcy case estimates that the company's estate can sue its former executives, lenders and others for $25.4 billion.
It's more than double what First Brands owed when it filed bankruptcy, which was $11.5 billion.
It is a good and convenient number and utterly unrealistic.
The $25.4 billion is what the estate wants the bankruptcy court judge to believe the estate can lawfully attempt to recover so that something will get into the hands of the creditors.
But more importantly that a lot will get into the hands of the lawyers and the other professionals handling the bankruptcy.
Marc S. Kirschner, the bankruptcy expert who filed the report, has been doing this for half a century. He knows the game.
He estimates that the actual recovery out of the $25.4 billion will be maybe $2 billion — roughly eight cents on the dollar of what the estate says it can claim.
If the plan is approved, (and it most likely will be, for it will make a lot of NY lawyers happy and well fed) the First Brands estate can then sue the company's executives, like Patrick James and others who ever took money out.
The lawyers will also get to sue lenders who made loans to First Brands and collected repayments with interest.
The lawsuits will hinge on whether they knew or should have known that their loans and hence the repayments came from fraud. They will also sue potentially, anyone and everyone who they can allege profited unjustly, on the road to the company's collapse.
The report values the claims against Patrick James, his brother Edward, and other executives at a mere $1 billion out of the $25.4 billion.
Which leaves some $24 billion aimed at the lenders who reaped super high interest rates from one very desperate First Brands.
And it is a bigtime number.
Eleven Years of Cleveland
First Brands was headquartered in Cleveland, though it had factories on five continents and 26,000 workers. And that $25.4 billion is about 11 years of running the city of Cleveland.
Whatever the estate collects, which maybe would run Cleveland for one year, gets divided among the creditors, after, and please do not forget it, the bankruptcy professionals: the bankruptcy counsel, local counsel, conflicts counsel, restructuring advisors, investment bankers, claims agents, tax accountants, independent directors, foreign counsel, examiners, the examiner's forensic accountants, the fee examiner hired to review everyone else's bills, the auctioneers, the brokers, the appraisers, and the trustee who will spend the next three years suing on the creditors' behalf, are paid first.
These professionals have already billed the First Brands estate around $250 million.
The Fee Machine
But $250 million is the mere beginning.
There will be many additional fees for the professionals handling and working this bankruptcy, all of whom will be paid before the creditors.
Somebody has to go after the $25.4 billion to collect the $2 billion Kirschner projects. That work is not done for free.
Clawback litigation will be run by a litigation trustee who, in turn, hires law firms on contingency fees.
In large fraudulent-transfer cases, their share is 33 percent. Then there is the trustee's compensation, the forensic accountants, expert witnesses, and the cost of processing evidence in a case where the examiner already evaluated 14 terabytes of data.
If they should really collect two billion, with counsel at 33 percent, ($660 million), and trustee fees and expenses, the total should be around $800 million.
That leaves about $1.2 billion for the creditors.
That is separate from the $250 million already charged as the cost of closing, or rather winding the company down.
Who Fed at the Table
Fee applications filed with the bankruptcy court in Houston give us some of the numbers of who was fed for shuttering First Brands.
Now keep in mind this is only from September 29, 2025, when First Brands filed for bankruptcy through March 31, 2026 — the first six months of a (the) case.
It is now in month ten.
Weil, Gotshal & Manges, the company's bankruptcy counsel: $108.4 million.
In the most recent quarter, Weil billed 30,325 hours at an average rate of $1,611.62 an hour. That's a lot of hours for 90 days.
If the lawyers at Weil worked every day, weekends and holidays included, these lawyers, billing at $1,611.62 an hour, billed 337 hours a day. That's like 42 lawyers working fulltime every day, including weekends and Martin Luther King and Presidents Day.
One firm. Three months. $48.9 million.
Then there is Alvarez & Marsal, the clever accountants hired by Patrick James to save the company, his restructuring firm that wound up running the company.
They billed $67.8 million for dismantling the company, a darn sight better than saving it to be sure.
Lazard Frères, the investment banker: $28 million.
Then the creditors' committee, billing the estate.
Brown Rudnick, co-counsel: $21.2 million.
M3 Advisory Partners: $12.4 million.
Cole Schotz: $2.6 million.
Nardello & Co., investigators: $1.5 million.
Ducera Partners, the committee's investment bank: $943,000.
Ernst & Young, tax: $2.6 million.
Simpson Thacher & Bartlett, retained to represent the off-balance-sheet shell entities at the center of the fraud: $2 million.
Total: $247,407,218.68.
That is in fees alone.
It excludes Martin De Luca, a partner at Boies Schiller Flexner, appointed by the bankruptcy court in Houston as the independent examiner. His pay was $7 million.
It also excludes SB360 Capital Partners, the liquidation firm, and other professionals, such as law firms in Australia, the Netherlands and elsewhere, listed on supplemental schedules.
Four More Months
It stops on March 31. Four more months have run since.
And if we take it as four more months billed at about the same fat rates, we are looking at another $165 million give or take, with its due bill soon to come.
That's something like $410 million to wind down an estate that probably did not collect anything more.
In short, the company was eaten entirely by chefs leaving the creditors a-fasting.
Part 8 examines what the company's carcass actually sold for, who earned a commission on it, and why not one dollar of it will ever reach an ordinary creditor.