James, who stepped down as CEO last month, enriched himself and his family by “misappropriating hundreds of millions (if not billions) of dollars from First Brands,” the company said in a lawsuit filed with the U.S. Bankruptcy Court for the Southern District of Texas, according to Reuters.
First Brands, which makes filters, brakes and lighting systems, filed for bankruptcy protection in September after its lenders began investigating irregularities in the company’s financial reporting.
James spent the money on 17 “exotic cars,” “lavish” homes in Malibu, Los Angeles County, and the Hamptons, New York. He also paid six-figure bills for a “celebrity” chef and a personal trainer, the company alleged.
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Aerial view of a neighborhood in Los Angeles. Photo by ZUMA Press Wire via Reuters |
He “misrepresented First Brands’ financial position to secure billions in debt financing,” the suit claims. He then secretly pilfered some of the company’s assets to fund his and his family’s lavish lifestyle, it added.
One of the lawsuit’s claims is that James directed First Brands to raise cash by selling fake or doctored invoices to factoring firms, which are companies that provide immediate financing in exchange for receivables, according to Bloomberg.
First Brands further alleges that James mixed personal and corporate accounts, draining more than US$700 million from the business.
Among the allegations, James is said to have used company funds to pay US$500,000 for a private “celebrity chef” in 2025 and at least US$3 million in rent for a New York City townhouse. The chef’s name was not disclosed.
He is also accused of instructing others to submit invoices reimbursed by Battery Park Holdings, an entity he owns. First Brands transferred more than US$10 million to Battery Park between 2018 and 2025 to cover personal and family expenses.
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Fram oil filters, manufactured by the auto parts maker First Brands, are displayed for sale in Medford, Massachusetts, U.S., October 21, 2025. Photo by Reuters |
The suit adds that First Brands made additional large transfers to entities controlled by James “in close proximity to his acquisition of various real estate properties and cars,” including before his purchases of homes in Malibu in 2019 and the Hamptons in August 2021.
Interim CEO Charles Moore said in a court filing that the company fears James, who lives in Ohio, could flee the U.S., describing him as a “Malaysian national” with “hundreds of millions of dollars at his disposal.”
But a spokesperson defended him in a statement: “James is an American citizen with deep business and financial roots in the U.S.
“He also has not been a Malaysian citizen since 1988. The notion that he is a potential flight risk is patently absurd.”
James’ lawyers have also countered that allegations of money being diverted from First Brands “are not supported by evidence or documented asset tracing.”
It appears that if funds were transferred within the timeframe roughly close to personal expenditures by James, they were concluded to have been used for that personal expenditure, the lawyers added.
