First Brands accuses former CEO of misappropriating millions, perhaps billions

Core Points - First Brands has filed a lawsuit against its former CEO Patrick James, accusing him of orchestrating fraudulent activities that led to the company's insolvency [1] - The lawsuit claims that James misappropriated hundreds of millions to billions of dollars from First Brands, significantly impacting its financial health [1][3] - First Brands incurred at least $2.3 billion in liabilities due to non-existent or doctored invoices, and James is accused of engaging in double-pledged collateral financing transactions [3] Company Actions - Following the bankruptcy filing, First Brands has appointed a special committee of independent directors to investigate its off-balance-sheet financing practices [4] - James stepped down as CEO last month amid the ongoing investigations into the company's financial irregularities [4][5] - The company filed for bankruptcy protection in September after lenders began scrutinizing its financial reporting [5] Legal Proceedings - James has filed a legal motion to support the appointment of a fiduciary to investigate the company's financial practices leading up to the bankruptcy [4] - The lawsuit highlights the potential for significant financial misconduct within the company, raising concerns about the private credit market and the exposure of major financial institutions [2]