AMERICAS DISTRESS DAILY: Tricolor Collapse Causes Risk Rethink

Tricolor’s sudden bankruptcy has creditors reevaluating what they thought was a sound business model, and authorities are probing allegations of fraud.

• Tricolor relied on extensive lines of credit from big banks, then bundled the loans into bonds and sold them to investors, but regulators and lenders had limited visibility into its finances.
• Even before Tricolor collapsed, credit rating firms didn’t raise red flags about Tricolor’s business practices, and some of its bonds are now down to around 12 cents on the dollar.

In Other News:

• Gold Reserve filed a motion to disqualify Weil, Gotshal & Manges and Evercore as advisers ...