Court Appoints Investigator for First Brands Fraud Probe
A U.S. bankruptcy court has appointed Martin De Luca to oversee a $7 million investigation into fraud allegations at First Brands. The auto parts maker faces severe cash pressures amid its Chapter 11 restructuring.
In a significant development for First Brands Group, a U.S. bankruptcy court has appointed Martin De Luca as a corporate litigator to oversee an independent investigation into fraud allegations tied to the company's third-party financing practices. The appointment, approved by U.S. Bankruptcy Judge Christopher Lopez on January 9, 2026, comes as the auto parts maker grapples with severe financial challenges during its Chapter 11 restructuring.
The investigation, budgeted at $7 million, seeks to examine potential governance failures that have plagued First Brands, which filed for bankruptcy protection in late September. The company's financial distress is underscored by its estimated liabilities ranging from $10 billion to $50 billion, while assets are valued between $1 billion and $10 billion. First Brands currently has approximately $190 million in cash remaining after borrowing $1.1 billion to initiate bankruptcy proceedings, but company lawyer Sunny Singh has warned that funds may only last until the end of January.
