Tricolor Trustee Plans to Sue Bankrupt Auto Dealer’s Founder (1)

Bankrupt subprime auto dealer Tricolor Holdings is preparing to sue the company’s founder, who the trustee alleges was at the center of a massive fraud that led to the company’s collapse into bankruptcy, according to a court filing.

Daniel Chu is already facing probes by the US Justice Department and the US Securities and Exchange Commission, Tricolor’s bankruptcy trustee said in a filing in federal court in Dallas. The trustee said it “expects to file” a so-called adversary complaint against Chu by the end of the month.

Chu declined to comment.

The trustee asked a judge to limit Chu’s access ...