Here’s what you need to know:
- Former executives seek delay in criminal trial, citing overwhelming mountains of documents, but not the right ones.
- Wrangling continues in possible class action suits over layoffs as First Brands folded.
- More bankruptcy hearings are set for this week.
Patrick and Edward James filed motions recently pushing for more time before their criminal trial in the First Brands Group bankruptcy.
Originally set to begin in July, the brothers and former executives at the aftermarket company say they don't have time to adequately sift through millions of documents produced in the U.S. Attorney's Office's discovery proceedings. Furthermore, they argue, there are key pieces of evidence they have not yet received.
[RELATED: Court filings detail alleged wrongdoing in First Brands’ collapse]
In an April 10 letter, Patrick James' attorneys at Quinn Emanuel say the government has produced 7 million pages of discovery in five productions that include 133 third parties. The documents include emails, financial records, accounting data and more, going back decades.
"Although the government has represented that it will achieve substantial completion by the end of the month, significant volumes of material will remain outstanding thereafter, and the government has refused to provide any date certain by which those materials will be produced," the attorneys say.
Pretrial motions are due before Judge Analisa Torres on May 1.
"This stonewalling will, at a minimum, result in significant delay in the defense's ability to prepare for trial," the letter says. "The incomplete state of the government's production directly impairs the defense's ability to make pretrial motions."
Along with the letter to Torres, Patrick James' lawyers filed a copy of a letter from the U.S. Attorney's Office for the Southern District of New York, which indicted the James brothers in January. The letter is dated April 3.
In responding to earlier requests for more information on the records found in the discovery process, the office says it will send more information, but that it's not obligated to "catalog its trial proof or index every relevant record, false statement or fictitious certification, as you request."
The office goes to call a request for a bill of particulars "a demand for the government to disclose its trial theories, identify anticipated witnesses and preview the evidentiary basis for each allegation and element of the offenses charged." It says the indictment itself is sufficient at this juncture in the trial.
In a second April 3 letter, the office disagrees with the James brothers that certain agencies and cooperating firms, such as First Brands Group itself, are part of the prosecution team. Including them in that term would significantly expand the scope of discovery proceedings.
Instead, it says, it has included information from other agencies and organizations as far as is required by law.
"The government takes its disclosure obligations seriously and has worked diligently throughout this investigation to fulfill them," the letter says.
Edward James' counsel sent their own letter to Torres on April 12. It asks for an extension to the pretrial motions deadline and proposes moving the trial date to the fall.
"The government has failed to timely produce discovery materials that are essential to the preparation of Mr. James' defense," the letter says. "Based on our last communication with the government, the government has reserved its position with respect to our motion for an adjournment but has indicated that if the court grants such a motion, the government is available for trial in the fall of 2026."
Edward James' legal team also contend the prosecution teams include several government agencies and other organizations beyond the U.S. Attorney's Office for the Southern District of New York, including the Internal Revenue Service, the U.S. Attorney's Office for the Northern District of Ohio, and the Securities and Exchange Commission.
"This case is complex, the prosecution team is very large, the government's discovery obligations are broad and the discovery materials produced to date are voluminous," the April 12 letter from Bracewell and Seth D. DuCharme says.
Attorneys fight for layoff cases
Two of the adversary cases in the First Brands bankruptcy revolve around alleged violations of the Worker Adjustment and Retraining Notification (WARN) Act. Adversary cases are like lawsuits, but in bankruptcy court. The WARN Act notifications serve to give employees enough advanced notice of reductions in workforce to allow for retraining or searching for employment.
As First Brands collapsed earlier this year, the company abruptly laid off more than 3,500 workers at it ran out of cash. Officials in cities and states affected by the layoffs reacted harshly. U.S. Sen Bernie Moreno, R-Ohio, called for an investigation.
"These scumbags should be prosecuted to the fullest extent of the law and rot in prison for the pain they're putting these workers and families through," Moreno wrote on X. "I will do whatever it takes to ensure all four facilities are placed in the hands of responsible owners and each and every worker affected do not lose their careers and livelihoods at the hands of alleged criminal fraudsters."
Mayor Wesley Harris, 37, has been mayor of Albion, Ill., for 10 years. It was home to Champion Labs, a First Brands filtration company that laid off around 600 workers, he said. He says Champion has been there as long as he's been alive. He found out about the layoffs when local media called him after the WARN notices published.
"They're devastated," he says of the Champion workers. "That's their career."
However, he was optimistic. The day before he talked to TPS this spring, a job fair drew more than 300 people. Harris described a warm scene as coworkers who hadn't seen each other in weeks reunited. He was hopeful everyone would be taken care of, eventually.
"It's so wonderful to see everyone getting together and being there for each other," he says. "Everyone's got to have a job at the end of the day."
In the adversary cases, two groups of former First Brands employees allege they weren't given adequate notice of the layoffs. The first case was filed Feb. 10 on behalf of Giancarlo Hernandez, who worked at a Brake Parts Inc., facility, also in Illinois. Since then, Hernandez has joined another case and former Hopkins employee Francisco Garza was chosen as the lead plaintiff as of Feb. 27. Hernandez joined a second case, filed Feb. 13 and lead by Maria Tapia, who worked for Brake Parts as well.
Each adversary case asks for class action status for all of the First Brands workers affected by the layoffs and, more importantly, each is led by a different legal team that seeks to be lead counsel in any resulting consolidated class action case. No hearing has been set in deciding either the question of class action status or who should be lead counsel.
First Brands has asked both cases to be dismissed.
