A group of bondholders has initiated legal action against the trustee overseeing Tricolor’s $2.3 billion senior unsecured notes, alleging the trustee failed to act on red flags related to financial misstatements. The lawsuit, filed in New York federal court, accuses the trustee of breaching fiduciary duties during the 2022 bond offering.
- Bondholders sued Tricolor’s trustee over a $2.3 billion debt issuance in 2022
- Alleged financial misstatements involved revenue overstated by up to 22%
- Three formal warnings were received by the trustee between March and June 2022
- Tricolor’s bonds now trade at 86 cents on the dollar, down 14%
- SEC has launched a review into trustee practices in private placements
- Case filed in New York federal court on January 13, 2026
A coalition of institutional and retail investors holding Tricolor’s 2022 senior unsecured notes has sued the bond trustee, asserting that the trustee ignored multiple warnings about material accounting discrepancies in the company’s financial disclosures. The lawsuit, filed on January 13, 2026, centers on a $2.3 billion debt issuance that was structured under a 10-year maturity with a 7.8% coupon rate. Investors allege that the trustee failed to verify financial statements that later were found to contain overstated revenues by up to 22% during an internal audit conducted in November 2024. The complaint highlights that the trustee received three formal alerts from credit analysts between March and June 2022 regarding inconsistencies in Tricolor’s revenue recognition policies. Despite these warnings, the trustee proceeded with the bond offering without initiating an independent review or seeking legal counsel. The investors claim this inaction constitutes a breach of the Indenture Agreement, which mandates the trustee to monitor material risks and protect bondholder interests. The legal action has triggered a 14% drop in the trading price of Tricolor’s outstanding bonds, now trading at 86 cents on the dollar. The lawsuit has also prompted a rare review by the Securities and Exchange Commission into the practices of corporate bond trustees, particularly in cases involving large-scale private placements. Legal experts suggest the outcome could set a precedent for holding trustees accountable in complex debt structures where transparency gaps exist. Tricolor, a multinational infrastructure firm headquartered in Singapore, has not issued a public statement in response to the suit. The company’s stock, listed on the Singapore Exchange (SGX: TRC), declined 8.3% on the day the lawsuit was filed, reflecting growing market concerns. The case is now pending before Judge Elizabeth Jackson in the Southern District of New York.