First Brands Creditors Allege Kickbacks on Deals Returning 300%

A major financier to First Brands Group is accused of orchestrating a kickback scheme with the founder’s brother that loaded the now bankrupt auto-parts supplier with expensive debt.

Onset Financial Inc. was “pillaging” the company through usurious financing arrangements approved by Edward James, the brother of founder Patrick James, a group of creditors said in a court filing Monday. Onset, which advanced the firm no more than $2.5 billion, already has obtained about $2.9 billion and is also seeking an additional $1.9 billion through claims in the bankruptcy case, the filing said.

The loans, typically maturing in less than ...