Unlock the Editor’s Digest for free
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
US prosecutors have indicted First Brands founder Patrick James and his brother Edward on fraud charges after the company collapsed into bankruptcy.
In an indictment unsealed on Thursday, federal prosecutors in the Manhattan US attorney’s office accused the brothers of “fraudulently obtaining billions of dollars from lenders and enriching themselves”.
They said under the pair’s direction, First Brands falsely inflated invoices and double- and triple-pledged collateral, falsified financial statements and “concealed substantial liabilities from lenders”.
A spokesperson for Patrick James said: “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.”
A spokesperson for the US attorney’s office did not immediately respond to requests for comment.
Patrick James was First Brands’ founder, chief executive officer and sole owner, while Edward James held a senior role at the company, overseeing much of its off-balance sheet financing.
First Brands has already filed separate lawsuits against both Patrick and Edward James, alleging that they defrauded creditors and enriched themselves. The two brothers have previously denied allegations of fraud.
This is a developing story