Judge Paul G. H. Smith in Detroit bars Aequum Capital Financial II from taking cash it gathers during First Brands’ bankruptcy inventory sales. The auto‑parts supplier, which filed Chapter 11 last year, is liquidating assets to satisfy creditors. Aequum, the firm that collected the inventory proceeds, now faces a temporary halt on distribution.

The injunction follows a court review of the liquidation plan that noted Aequum’s role as a middleman, collecting cash from sellers before forwarding it to creditors. By stopping the flow of funds, the judge aims to prevent misallocation that could undermine the orderly sale of First Brands’ inventory. Investors watch the move for signals on creditor protections in similar cases.

For First Brands’ creditors, the ruling guarantees that proceeds will go directly to the liquidation pool rather than through a potentially biased intermediary. Aequum’s temporary restriction may cost the firm up to millions in fees and delay payout timelines. Market watchers note that the decision could prompt other courts to tighten oversight of third‑party cash handlers in bankruptcy procedures.