Tricolor didn’t give a reason for its collapse in the Chapter 7 filing, Bloomberg reported Wednesday.
According to the Bloomberg report, the company’s filing claimed liabilities between $1 billion and $10 billion, assets in the same range, and at least 25,000 creditors.
Tricolor Holdings’ website was offline Wednesday.
It was reported earlier Wednesday that people with knowledge of a fraud incident disclosed Tuesday (Sept. 9) by Fifth Third Bank said banks including Fifth Third, JPMorgan Chase and Barclays were preparing to suffer hundreds of millions of dollars in combined losses from loans tied to Tricolor.
In a Fifth Third securities filing, the bank said it had uncovered “alleged external fraudulent activity” at a commercial borrower associated with that borrower’s asset-backed finance loan. The filing did not name the borrower.
“Based on currently available information, the Bancorp currently estimates that the non-cash impairment charge associated with this asset-backed finance loan, which would be recognized in the third quarter of 2025, will be in the range of $170 million to $200 million,” Fifth Third’s filing said.
The bank also said in the filing that it is “working with the appropriate law enforcement authorities in connection with this matter.”
Earlier this week, it was reported that Tricolor was preparing to file for bankruptcy and that it had put the majority of its staff on temporary leave and suspended operations in Arizona, California and Texas.
In addition to being a subprime lender, Tricolor is the seventh-largest independent used-car retailer in the country, and it is focused on selling vehicles to people with poor credit or without permanent residency documents.
Reuters reported Wednesday that Tricolor had operations in six states, was the third-largest used auto retailer in Texas and California, and said in June it had disbursed over $5 billion in auto loans to car buyers who had been “left behind by mainstream financial providers.”
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