Tricolor Founder Can Tap Insurance for Fraud Defense, Judge Says

Tricolor Holdings founder Daniel Chu, who faces federal fraud charges related to the collapse of the subprime auto-loan firm, won court approval to use company insurance policies to pay for his defense costs, a judge ruled Wednesday.

US Bankruptcy Judge Michelle V. Larson agreed during a Dallas court hearing to free $5 million in so-called directors and officers insurance to pay legal bills for Chu and others, including Tricolor itself, related to federal investigations of the company and its former managers.