First Brands’ bankruptcy debtors sued founder and former CEO Patrick James on November 3, 2025, alleging he diverted more than $700 million to himself or affiliated entities. James denied the civil allegations. A separate federal criminal case announced in January 2026 charges Patrick James and his brother Edward with fraud-related offenses; those charges are not the same case and remain allegations.
What First Brands alleges in the civil lawsuit
The adversary proceeding, First Brands Group, LLC, et al. v. Patrick James, et al., No. 25-03803, was filed by First Brands debtors in the U.S. Bankruptcy Court for the Southern District of Texas. The complaint alleges that James funneled more than $700 million to himself or affiliated entities between 2018 and 2025. That is the company’s allegation, not an established finding. Forbes reported the complaint’s alleged diversion figure.
Associated Press reporting on the complaint described alleged payments for personal and related-party expenses. The complaint reportedly said more than $100 million was moved in 2024 alone to James’s trust and other businesses not affiliated with First Brands. It also alleged transfers or spending that included:
- $8 million to a son-in-law’s wellness company;
- $2 million for James’s family office;
- at least $3 million toward rent for a New York City townhouse;
- $500,000 for a personal chef; and
- $150,000 for a personal trainer.
AP reported that most of the alleged transfers occurred from 2023 through 2025. These figures describe claims in the complaint as reported by AP, not court findings. Read AP’s account of the complaint and James’s response.
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How James responded
A spokesperson for James told AP that he “categorically denies the baseless and speculative allegations contained in the First Brands complaint.” The civil claims have not been established merely by being filed.
What happened in bankruptcy court
Along with its complaint, First Brands sought emergency relief, including asset restraints and a temporary restraining order. A later court filing recounts that the court issued a temporary restraining order on November 3, 2025, then denied the debtors’ request for a preliminary injunction after a November 10 hearing. The decision was dated November 12. The court cited, among other reasons, a lack of evidence of likely success on the merits as to several named entities, no substantial threat of irreparable injury, and a balance of harms and public policy favoring the defendants/petitioners. The later court filing recounts the interim ruling.
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That denial was a ruling on preliminary relief, not a final judgment on the complaint. The final disposition of the civil proceeding is not established by the cited materials, so the complaint’s current status should not be inferred from the injunction ruling.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.How the separate criminal case differs
On January 29, 2026, the U.S. Attorney’s Office for the Southern District of New York announced an indictment charging Patrick James and his brother Edward James with fraud-related offenses. Prosecutors alleged schemes involving fake or inflated invoices, collateral pledged more than once, falsified financial statements, and concealed liabilities. These are criminal allegations, distinct from First Brands’ civil claims, and are not findings of guilt. The U.S. Department of Justice announced the indictment.
| Issue | First Brands civil proceeding | Federal criminal case |
|---|---|---|
| Who brought it | First Brands debtors in bankruptcy | Federal prosecutors |
| Forum | U.S. Bankruptcy Court for the Southern District of Texas | Federal criminal court in New York; the indictment was announced by the U.S. Attorney’s Office for the Southern District of New York |
| Who is accused | Patrick James and other defendants named in the adversary proceeding | Patrick James and Edward James |
| Legal posture | Civil allegations seeking relief for the debtors | Criminal charges that prosecutors must prove |
| What the cited record establishes about outcome | A preliminary-injunction request was denied; that was not a final merits decision | The cited announcement describes charges, not a verdict |
The DOJ said First Brands entered bankruptcy in September 2025 with more than $9 billion in liabilities and $12 million in corporate cash, and reported approximately $5 billion in annual global net sales. Those are figures stated by the agency in its indictment announcement, not a resolution of the fraud allegations.
AP reported that former First Brands executive Peter Andrew Brumbergs pleaded guilty and was cooperating with the government when the indictment was announced. A James spokesperson said in response to the criminal charges: “Patrick James is presumed innocent and denies these charges. He built First Brands from nothing into a global industry leader and has always been devoted to the success of the company. Mr. James looks forward to presenting his case in court.” AP reported the indictment and James’s response.
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