First Brands Group will proceed toward a Chapter 7 liquidation after U.S. Bankruptcy Judge Christopher Lopez rejected the auto-parts maker’s proposed Chapter 11 plan in Houston on Monday. The plan would have created litigation trusts to pursue claims against founder Patrick James, other insiders and business partners, with advisers projecting roughly $2 billion in recoveries by the end of 2028. An earlier account put the required recovery at $1.9 billion, creating a discrepancy in the estimates. Lopez said the proposed timeline did not ensure full payment of at least $222 million in administrative claims, which have priority under the bankruptcy code, while First Brands also owes several billion dollars from before its September 2025 bankruptcy. The company entered the case with about $14 million in cash and liabilities exceeding $9 billion, later borrowing $1.1 billion from existing lenders. Most of that funding was exhausted by January, forcing reliance on customer prepayments from Ford and General Motors. First Brands sold Horizon Global for $64 million, Toledo Molding & Die for $80 million and Walbro for $50 million, and agreed in March to sell a portfolio of brands to Premium Guard for $25 million. Its $1.1 billion rescue loan was recently quoted at about 16 cents on the dollar, reflecting weak expectations for creditor recoveries. The company has closed 17 plants and eliminated 4,000 jobs. A court-appointed trustee will take over the estate and potential litigation, replacing the professionals overseeing the asset sales and wind-down.