TriColor Bonds and Securitizations Investigation

Investors who bought TriColor bonds or funds backed by TriColor auto loans are facing steep losses after TriColor Holdings, LLC filed for Chapter 7 bankruptcy in the Northern District of Texas on September 10, 2025. Public docket summaries confirm the liquidation case, with related affiliates also in Chapter 7, and show major banks appearing as secured creditors.

See docket summaries: Tricolor Holdings, LLC (3:25-bk-33487) • Tricolor Auto Acceptance, LLC (3:25-bk-33497) • Tricolor California Auto Group, LLC (3:25-bk-33502)

Ratings actions and trade press describe downgrades or suspensions across multiple Tricolor Auto Securitization Trust transactions and the installation of a successor servicer, developments that can pressure cash flows and investor recoveries.

KBRA downgrades and maintains Watch Downgrade • S&P suspends select TAST 2025-2 classes (coverage) • Vervent set to take over servicing • On-the-ground follow-up on servicing transition • Downgrade watch after Chapter 7 filing

Unfortunately, this is not the first time investors have been harmed by loan-backed securities sold by financial professionals. ChapmanAlbin has handled similar cases involving the GPB and Woodbridge series of funds and other high-risk investment products. In many of these cases, brokers, advisors, and insurance agents promoted these products without conducting the due diligence necessary to protect their clients’ money.

Why investors may have claims

Financial advisors and brokerage firms must recommend only suitable investments and perform reasonable due diligence before selling complex or illiquid securities. Selling securitized notes or funds tied to subprime auto loans to conservative or income-focused investors can be unsuitable and may violate FINRA rules and state blue sky laws. When firms fail to investigate or to disclose risks, investors can often pursue claims for negligence, breach of fiduciary duty, misrepresentation, or failure to supervise.

Learn more about how we handle investment fraud matters on our site: Ponzi Schemes overview

What happened at TriColor

• Filing date and court: TriColor Holdings, LLC filed a Chapter 7 liquidation on September 10, 2025, in the U.S. Bankruptcy Court for the Northern District of Texas, case no. 3:25-bk-33487. See docket summary.
• Impact on securitizations and bondholders: Rating agencies downgraded or suspended ratings across several Tricolor Auto Securitization Trust deals. The trustee and court moved to appoint a successor servicer, which can affect collections and remittances to noteholders. See KBRA downgrade notice and S&P suspension coverage.
• Market reaction: Trade press reported sharp repricing in debt tied to TriColor after the collapse and fraud probes. See downgrade watch coverage.

Who may be affected

• TriColor bonds or notes
• Funds, trusts, or structured products collateralized by TriColor auto loans
• Securitized debt obligations or tranches linked to TriColor receivables

Potential grounds for recovery

• Unsuitable recommendations to conservative investors
• Misrepresentations or omissions about liquidity, credit risk, or structure
• Failure to conduct adequate due diligence on the issuer and securitization program
• Failure to supervise brokers who concentrated clients in auto-loan backed products

What to do next

1. Gather documents: Monthly statements, trade confirms, offering materials, and any written risk disclosures.
2. Note timelines: Write down when the investment was recommended, what you were told, and your investment goals at the time.
3. Contact counsel: An investor-rights firm can evaluate potential FINRA arbitration or litigation against the selling brokerage or advisor.

Frequently asked questions

Is TriColor in reorganization or liquidation?

Chapter 7 is a liquidation. The company is not reorganizing under Chapter 11. The docket reflects a Chapter 7 petition filed September 10, 2025. See case summary.

Do rating downgrades matter for my claim?

They can. Downgrades and suspensions may support arguments that the products were riskier or less liquid than represented and that the risks were not properly disclosed at sale. See KBRA actions and S&P suspension coverage.

I invested through a fund that held TriColor paper. Can I still pursue recovery?

Possibly. If a brokerage firm recommended a fund or trust materially exposed to TriColor without adequate due diligence or suitability analysis, you may have a claim against the selling firm, even if you did not buy the notes directly.

Where can I read about the case?

You can review public docket summaries and filings that confirm the case number and key events, as well as trade coverage discussing rating actions and servicing changes affecting securitizations: Tricolor Holdings docket • KBRA downgrade notice • S&P suspension coverage • Servicing transition report

Free consultation for TriColor investors

If you or someone you know suffered losses in TriColor bonds, notes, or funds tied to TriColor auto loans, contact ChapmanAlbin for a free case evaluation. Call (877) 410-8172 or use our contact form to discuss your recovery options.