Auto dealer Tricolor filed for Chapter 7 bankruptcy in Texas court on Wednesday, moving to liquidate its business a day after Fifth Third Bank warned of alleged fraudulent activity at the company.

Tricolor, the third-largest used auto retailer in Texas and California, has more than $1 billion in assets and over $1 billion in liabilities, with more than 25,000 creditors, according to its bankruptcy petition.

Fifth Third said late on Tuesday it had discovered alleged external fraudulent activity related to a $200 million asset-backed loan held by Irving, Texas-based Tricolor.

Tricolor filed for Chapter 7 bankruptcy on Wednesday. Bloomberg via Getty Images

Fifth Third said it was working with law enforcement and that it expected to take a $170 million to $200 million impairment charge fo

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