What Tricolor pledged, to whom, and what the records found

analysisThe inventory lines were secured by vehicles. TBK Bank's $60.5 million floorplan facility is secured by a first-priority security interest in Tricolor's vehicle inventory and certain other assets, and Renasant Bank's loan primarily by liens on the used car inventory; TBK Bank reported that other creditors assert interests in some of the same vehicles. The noteholders' complaint alleges that on December 12, 2022 Kollar told an employee to alter sales report data delivered to TBK Bank to conceal that Tricolor had sold vehicles listed as collateral for its loan, an allegation in a civil complaint. The indictment's account of inventory collateral concerns an unnamed "Lender-2" and is not matched here to TBK Bank or Renasant Bank. Origin Bank's loans to Tricolor Holdings were secured primarily by notes receivable rather than by vehicles or warehouse collateral, and after the filing the bank said it was evaluating the status and valuation of that collateral; the filing does not say whose notes receivable were pledged. ^{1 2 3 4}

analysisThe customer loans themselves went to the warehouses. The SEC, which does not name the lenders, says Tricolor's warehouse credit agreements, often formed through special purpose vehicles, let each lender or lender group advance cash against auto loan receivables pledged to the facility; the agreements prohibited double-pledging, required first-priority security interests, imposed eligibility and concentration limits including delinquency thresholds, and required Tricolor to remove ineligible or charged-off loans. The noteholders say Tricolor set up at least six bankruptcy-remote warehouse SPVs between 2018 and September 2025, which used the borrowed funds to buy auto loans originated at Tricolor's dealerships and pledged those loans, the financed vehicles and all proceeds back to the lenders; their complaint, dismissed in July 2026, does not list the six SPVs by name. ^{5 3}

analysisFor the BlackRock loan and security agreement of August 6, 2020, under which Tricolor Auto Acceptance and Tricolor Holdings were borrowers with Wilmington Savings Fund Society as agent, the retained documents state neither the amount nor the collateral, and the agreement itself is not among them; the SPV 4 borrower represented that it was an "Excluded Subsidiary" and a "Special Purpose Affiliate" under that agreement. ⁶

analysisThe loans pledged to SPV 4 were originated by Tricolor Auto Group, Tricolor California Auto Group, Flexi Compras Autos and Tricolor Auto Acceptance. The dealership companies transferred their receivables to Tricolor Auto Acceptance under transfer agreements, and Tricolor Auto Acceptance sold them to SPV 4 under a purchase agreement. The SPV 4 agent says the originating companies sold the loans free and clear, as verified through representations by the originators, SPV 4 and Tricolor Auto Acceptance and confirmed by legal opinions, and that SPV 4 became lienholder on each financed vehicle, assigning those rights to the agent; whether each title actually recorded SPV 4 as lienholder is not shown in the retained documents. ^{1 2}

analysisThe agreement limited what could count as eligible collateral. A receivable had to be no more than 30 days past due at funding, never defaulted, secured by a first-priority perfected security interest in the vehicle in favour of the originator that had been assigned to Tricolor Auto Acceptance and then to the borrower and the agent, and free of other liens. Concentration limits capped the eligible pool at 80% from Texas obligors, 40% from California and 10% from any one dealership; 32.5% with a loan-to-value ratio above 140%; 60% without a FICO score and 10% with a score below 500; 2.5% in credit tier E; and 10% under the Ganas Ya! brand. The borrower represented at closing and on each funding date that the agent's security interest ranked ahead of all other liens and that it owned the receivables free and clear. These are contractual criteria for what could be pledged, not a description of the pool actually pledged. ¹

analysisAccording to their agent, the SPV 4 lenders hold a first-priority lien on the auto loans bought by SPV 4, the financed vehicles, the related files, all customer payments including insurance proceeds, and the collection accounts. The credit agreement's grant also covers the deposit accounts subject to the master collection account agreement, the purchase agreement with Tricolor Auto Acceptance and its transfer agreements, and an assignment to the agent of the financing statements filed by the borrower against Tricolor Auto Acceptance; the borrower authorised financing statements describing the collateral as all of its assets. Tricolor Auto Acceptance separately granted the agent a lien on its master collection account at Wells Fargo Bank under a deposit account control agreement. The contract files were held by Wilmington Trust as collateral custodian in Buffalo, New York, while the receivable files stayed with Tricolor Auto Acceptance in Dallas. As servicer, Tricolor Auto Acceptance collected the payments as agent for SPV 4 and its secured parties, held them in trust and had to deposit them into segregated accounts controlled by the agent, with proceeds of sold, damaged or repossessed vehicles going to the collection account; it represented that it had granted control of the master collection account to no one except under the master collection account agreement and an intercreditor agreement. ^{2 1}

analysisLoans left the warehouse for a securitisation through a release: once the stated amount was deposited into the collection account, the agent released its lien on the listed loans, vehicles, files and proceeds. SPV 4 periodically repaid part of the facility so that receivables could be sold to a securitisation trust, and had to repay the secured parties for receivables that failed the eligibility criteria. On the noteholders' account, each trust then issued notes to the depositor in exchange for the loans, the depositor sold the notes to the underwriters for cash raised from investors and used it to buy the receivables from the warehouse SPVs, which paid down the warehouse lines, and each trust pledged its pool to Wilmington Trust as indenture trustee. The SEC instead names Tricolor Auto Acceptance as the seller to the depositor; both accounts are reported, and the agreements themselves are not retained. ^{1 2 3}

analysisFor the TAST 2023-1 offering, Deloitte & Touche LLP performed agreed-upon procedures on a statistical file of the sponsor, Tricolor Auto Acceptance, with J.P. Morgan Securities LLC as the other specified party. The procedure checked whether each sampled title certificate showed the security interest of "Tricolor Auto Group" or "Ganas Auto" (or another originating affiliate as represented by the company), and the report made no representation as to the actual characteristics, existence or ownership of the receivables. Agreed-upon procedures test a sample against the company's own file; they are not an audit and do not test whether loans were pledged elsewhere. ¹

analysisThe noteholders' complaint describes a collateral review of SPV 4 by CBIZ MHM, LLC, engaged by JPMorgan in or around September 2023 under the facility's audit rights. It says CBIZ found that 49% of the payments received on January 12, 2024 and 32% of those received on January 24, 2024 went to an account not belonging to SPV 4, that the monthly gap between collections in the servicer reports and the cash delivered to SPV 4's accounts reached nearly 65%, that 90 accounts more than 90 days past maturity were listed as current and eligible, and that two charged-off accounts whose vehicles were never recovered showed $47,000 of recoveries from an unidentified source; Tricolor attributed the recoveries to an index-based accounting entry and the aged accounts to a "system error". Barclays had access to the report, and Fifth Third received a similar report for SPV 6. The CBIZ reports are not retained, and in dismissing the noteholders' case Judge Rakoff found that the CBIZ report was not an audit. The complaint also says the banks knew that a first-quarter 2023 audit begun by Ernst & Young had been put on hold in April 2023 without explanation and that Tricolor had conducted no operational audit in the twelve months to January 31, 2024; Ernst & Young's engagement is not otherwise documented in the retained records. ²

analysisThe noteholders and the prosecutors quote internal messages about moving loans between facilities. According to the complaint, on March 1, 2023 Seibold told Goodgame he was taking accounts from SPV6 (the Fifth Third facility) and pledging them on SPV3 (a facility later rolled into JPMorgan's SPV 4) to get liquidity; on July 28, 2023 Chu asked Kollar to "reconstruct" a lender's borrowing base; and on September 8, 2024 Goodgame told Seibold that several warehouse facilities were maxed out and that SPV 5 could not be used because Tricolor was "trying to keep [SPV 5] relatively clean". The indictment quotes the same March 2023 message, in which Seibold added that he was "then possibly taking SPV5 accounts and double pledging on SPV6", and dates to September 8, 2023 an exchange in which Seibold wrote that SPV6 and SPV3 were capped out and that there was some room on SPV5 "but are trying to keep it relatively clean". These are allegations in a civil complaint and an indictment; the indictment is an accusation, and the defendants are presumed innocent unless proven guilty. ^{1 2}

analysisThe noteholders say that in August 2025 an analyst at an investment fund with access to the loan data, which the complaint does not name, noticed that loans with a balance of $63 million backing the JPMorgan facility were listed as performing although they had received no payment in over six months. JPMorgan then called in FTI Consulting, which within a few days concluded that Tricolor had about $800 million of bogus collateral: its servicer reports showed $2.2 billion pledged or sold to the warehouse SPVs and the trusts, while its internal dealer management system showed $1.4 billion of real loan collateral. FTI's work is not retained. In October 2025 the SPV 4 agent told the bankruptcy court that it now appeared that many of the auto loans sold to the SPVs, including SPV 4, might be double-pledged or even fictitious, although the extent remained to be determined. ^{1 2}

analysisThe noteholders' complaint reports a forensic analysis by the Chapter 7 trustee: 31,408 auto loans were pledged or sold to two or more warehouse SPVs or securitisations, representing $547,928,874 of falsely reported collateral value, and 6,960 loans with $135,488,888 of balances were entirely fictitious, together about $683 million of overstated collateral, roughly 31% of the purported $2.2 billion of receivables the trusts should have received from the warehouse SPVs. The double-pledging worked mainly through "clone loans" with modified account IDs but the same vehicle data; in one example a single loan appeared twice in SPV 6, again in SPV 4 and again in TAST 2024-3. The analysis itself is not retained; a December 2025 press account of an earlier trustee filing gave a preliminary figure of at least 29,000 loans tied to vehicles already securing other debts. ^{1 3}

analysisTrust by trust, the complaint gives what each securitisation paid the warehouse SPVs and other Tricolor affiliates and how many of the loans it acquired were already double-pledged at issuance, from at least 750 of 14,293 loans in TAST 2024-2 to at least 9,000 of 13,950 in TAST 2024-1, and says that in each case the SPVs used the proceeds to repay the lender defendants and that certain other loans were fictitious. For TAST 2025-2 the complaint gives 12,486 loans acquired against a stated pool of 12,570 receivables elsewhere, without explaining the difference. ¹