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First Brands Founder Indicted on Fraud Charges After Bankruptcy Fallout

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Federal prosecutors have indicted First Brands founder and former CEO Patrick James on fraud-related charges, alleging he orchestrated years of deceptive accounting that led to the auto parts supplier’s collapse and bankruptcy. James, 61, faces multiple counts including bank fraud, wire fraud, money laundering conspiracy and running a continuing financial crimes enterprise. His brother Edward James, a former senior vice president at the company, has also been charged. Prosecutors say the scheme defrauded lenders of billions of dollars before First Brands filed for Chapter 11 protection in September with more than $9 billion in liabilities.

According to the indictment, First Brands falsely portrayed itself as a successful and fast-growing global business while concealing mounting liabilities and cash-flow stress. Prosecutors allege the James brothers inflated growth through practices such as double- and triple-pledging collateral, faking invoices, and hiding debt off the balance sheet between 2018 and 2025. A former executive, Andy Brumbergs, has pleaded guilty in a related case and is cooperating with authorities. Patrick James has denied all charges, while Edward James’ lawyer said his client acted with integrity and will contest the allegations in court.

The criminal case adds to the turmoil surrounding First Brands’ bankruptcy, which has disrupted supply chains for major automakers including Ford and General Motors. New company management has accused Patrick James of leaving the firm insolvent while transferring hundreds of millions of dollars to himself. To keep critical operations running, a bankruptcy judge has approved short-term financing support from Ford and GM, even as First Brands winds down several business units and struggles with dwindling cash reserves.

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Domino’s Pizza indicates shutdown of operations in Russia

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The owner of the Domino’s Pizza franchise in Russia has announced plans to close its branches and file for bankruptcy, signaling an end to its operations due to the challenging business environment in the country.

DP Eurasia, which operates 171 Domino’s Pizza outlets in Russia, has decided not to proceed with the sale of its pizza chain’s shops in the face of increasing difficulties. This move comes in the wake of Western companies disengaging from Russia following the Ukraine invasion and economic sanctions.

While some businesses have chosen to exit, others, including Domino’s, have faced criticism for remaining. DP Eurasia owns 68 of the Domino’s Pizza shops in Russia and franchises 103 to local operators. The company’s presence in Russia will be terminated as a result of this decision.

DP Eurasia, which also holds master franchise rights for Domino’s in Turkey, Russia, Azerbaijan, and Georgia, had been evaluating its options after sanctions were imposed. The Russian economy has been impacted by sanctions since the conflict in Ukraine in February 2022, leading to several well-known companies shuttering their operations.

Pressure was applied to other major brands like McDonald’s and Coca-Cola to follow suit. Some companies, such as Unilever, have defended their continued operations in Russia, citing complexities and potential takeovers by the Russian state.

Despite this, Domino’s Pizza Inc., the American multinational and master franchisor, clarified that it had ceased supporting the Russian market through its subsidiaries since early 2022.

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