First Brands Locks Down $1.1B Lifeline – Court Greenlights Mega-Loan

Another day, another billion-dollar corporate bailout—but this one’s got the judge’s stamp.

First Brands just scored final court approval for its $1.1 billion financing package, proving that even in 2025, old-school debt still beats crypto leverage (for now). The deal’s closed, the lawyers are popping champagne, and shareholders are pretending they weren’t sweating bullets.

Funny how ‘strategic liquidity injections’ always seem to land right before earnings season. Coincidence? Probably not.

Creditors protest, judge shrugs, deal moves forward

The hearing on Thursday was packed, with close to 100 lawyers and advisers squeezed into that Houston courtroom, fighting over who gets what. People were hopping between side rooms and hallways, trying to get something on paper.

Leading the charge for First Brands was Weil Gotshal & Manges, the law firm tasked with keeping the company from collapsing. And collapse was a real threat. Without the loan, they said, the company WOULD be forced into a messy fire sale that wouldn’t cover much of anything.

Creditors backing the deal said this was the only real option. But the committee of unsecured creditors wasn’t buying it. Their advisers warned the loan could carry an interest rate as high as 74%, which they described as totally outrageous.

But again, Christopher said, “There are no better terms out there.” He admitted he didn’t love that the lenders would get top priority for both the new and old debt, but said this was an ugly case all around. “This is anything but a common case,” he added.

Buried in the loan terms is another protection; if the money runs short, First Brands agreed to guarantee $200 million for admin expenses. That includes employee wages, building leases, and advisers’ pay.

No one in the room wanted to be the one left hanging if this whole thing spiraled further down.

Founder gets hit with lawsuit while court eyes more hearings

While all that was happening in court, First Brands’ new management hit its founder, Patrick James, with a fresh lawsuit. They claim Patrick stripped the company of billions, draining it dry before everything blew up. He denies it, obviously.

But the lawsuit is now one of the biggest bets left on the table. If they win, it could bring real money back into the estate. And yes, there’s already a formula in place for who gets what if they manage to claw back anything from Patrick or anyone tied to him.

Now the court has more coming.On Monday, lawyers will meet again to decide whether Patrick can be stopped from selling off his assets while the case against him plays out.

Then later this month, the judge will hear arguments on whether to bring in an independent examiner to dig into all the shady stuff that went down at First Brands before it filed for bankruptcy.

Meanwhile, with lawyers and consultants billing like crazy, Christopher called it “an expensive room” and told both sides to work faster before the fees eat what’s left. Estimates say professional fees alone could hit hundreds of millions of dollars before this thing wraps, according to the Financial Times.

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