Tricolor Bankruptcy Sets Up Fight for Auto Lender’s Assets After Alleged Fraud

In the wake of the sudden collapse of subprime auto lender Tricolor Holdings, creditors across the US are scrambling to stake their claim on the company’s remaining assets and contain their losses.

In Dallas, the regional bank Triumph Financial Inc. has dispatched teams of employees to used-car lots, where they’re identifying and whisking away to safe locations the vehicles they believe are the collateral to their loans. In midtown Manhattan, a boutique investment firm that built a position in Tricolor’s asset-backed bonds, Clear Haven Capital Management, has been calling other bondholders, urging them to band together and fight to keep the big banks away from the assets that belong to them. Those banks, including JPMorgan Chase & Co. and Fifth Third Bancorp, have begun to forensically examine their own collateral to try to ascertain the magnitude of the losses.