First Brands Aims to Assure Lenders by Chasing Trapped Funds

First Brands advisers sought to reassure skittish creditors after the value of its $1.1 billion rescue loan collapsed, saying business has stabilized since filing Chapter 11 and moving to unlock funds from receivables it can’t currently access.

The firm said in a press release on Friday it’s seeking court authorization to access about $250 million that’s either being held by First Brands customers or sitting in segregated accounts as part of the bankruptcy process. Those funds would supplement the rescue loan First Brands lenders already agreed to extend the business.

The supplemental funds are related to customer receipts for ...