Santander Auto Trust Faces Legal Headwinds Over Trustee Actions

TL;DR

**The legal action against Wilmington Trust for alleged breaches in Tricolor Holdings securitizations casts a shadow on Santander's auto trust, signaling potential operational and reputational risks for investors.**

AI Summary

Santander Drive Auto Receivables Trust 2023-1, a securitization entity, filed its 10-K for the fiscal year ended December 31, 2025, indicating no common equity outstanding and omitting standard financial statements as per General Instruction J to Form 10-K. The filing highlighted a significant legal proceeding initiated on February 3, 2026, against Wilmington Trust, National Association (WTNA), the owner trustee, in the Supreme Court of New York. Investors are seeking unspecified damages from WTNA for alleged breaches of contract and duties related to waterfall payments, servicing transition costs, post-event of default duties, and custodian actions concerning Tricolor Holdings, LLC asset-backed securitization transactions. Despite this, Santander Consumer USA Inc., Santander Bank, N.A., and Citibank, N.A., as Servicing Participants, reported no material instances of noncompliance with applicable servicing criteria, as confirmed by their Reports on Assessment and Attestation Reports. The trust's strategic outlook remains focused on the performance of its auto receivables pool, with ongoing oversight from its sponsor, Santander Consumer USA Inc., and depositor, Santander Drive Auto Receivables LLC.

Why It Matters

This 10-K filing, while not containing traditional financial statements, is crucial for investors in Santander Drive Auto Receivables Trust 2023-1 as it reveals a significant legal challenge against Wilmington Trust, National Association, the owner trustee. The lawsuit, alleging breaches of contract and duties related to waterfall payments and servicing, could impact the trust's operational stability and investor confidence, especially if the unspecified damages are substantial. For employees and customers of Santander Consumer USA Inc. and Santander Bank, N.A., the continued compliance with servicing criteria is a positive sign of operational integrity, but the broader market will watch how this legal action against a key trustee affects the securitization landscape and the perceived risk of similar auto asset-backed securities.

Risk Assessment

Risk Level: high — The risk level is high due to the disclosed legal proceeding against Wilmington Trust, National Association, the owner trustee, for 'unspecified amount of damages' related to alleged breaches of contract and duties. This lawsuit, filed on February 3, 2026, directly impacts a key party in the trust's structure and could lead to significant financial liabilities or operational disruptions, even though WTNA intends to 'vigorously defend itself.' The lack of specific financial details in the 10-K regarding the trust's performance also contributes to higher uncertainty.

Analyst Insight

Investors should closely monitor the legal proceedings against Wilmington Trust, National Association, as the outcome could have implications for the trust's cash flows and the broader auto ABS market. Given the 'unspecified amount of damages,' investors should consider the potential for increased legal and administrative costs, and assess their exposure to similar securitization structures where WTNA serves as a trustee.

Financial Highlights

debt To Equity

0.0

revenue

$0

operating Margin

N/A

total Assets

$0

total Debt

$0

net Income

$0

eps

$0

gross Margin

N/A

cash Position

$0

revenue Growth

N/A

Key Numbers

• 2025-12-31 — Fiscal Year End (The period covered by this 10-K filing.)
• 2026-02-03 — Legal Action Date (Date investors served Wilmington Trust, National Association with a civil complaint.)
• 333-261901-08 — Commission File Number (The SEC file number for Santander Drive Auto Receivables Trust 2023-1.)
• 0001959826 — Central Index Key Number (The CIK number for the issuing entity, Santander Drive Auto Receivables Trust 2023-1.)

Key Players & Entities

• Santander Drive Auto Receivables Trust 2023-1 (company) — issuing entity
• Wilmington Trust, National Association (company) — owner trustee and defendant in legal action
• Santander Drive Auto Receivables LLC (company) — depositor
• Santander Consumer USA Inc. (company) — sponsor and Servicing Participant
• Santander Bank, N.A. (company) — Servicing Participant and servicer
• Citibank, N.A. (company) — indenture trustee and Servicing Participant
• Tricolor Holdings, LLC (company) — entity related to asset-backed securitization transactions involved in lawsuit
• Corey Henry (person) — President and Chief Executive Officer of Santander Drive Auto Receivables LLC
• Supreme Court of the State of New York, County of New York (regulator) — venue for legal complaint
• PricewaterhouseCoopers LLP (company) — independent registered public accounting firm for SC and SBNA

FAQ

Risk Factors

• Investor Lawsuit Against Owner Trustee [high — legal]: A significant legal proceeding was initiated on February 3, 2026, against Wilmington Trust, National Association (WTNA), the owner trustee. Investors are seeking unspecified damages for alleged breaches of contract and duties related to waterfall payments, servicing transition costs, post-event of default duties, and custodian actions concerning Tricolor Holdings, LLC asset-backed securitization transactions.

Industry Context

The auto finance industry, particularly within the securitization market, is characterized by intense competition and evolving regulatory scrutiny. Companies like Santander Consumer USA Inc. operate in a landscape where efficient servicing and robust risk management are paramount to maintaining investor confidence and access to capital markets.

Regulatory Implications

The lawsuit against Wilmington Trust, National Association highlights potential risks associated with trustee duties and compliance with securitization regulations. While servicing participants reported no material noncompliance with servicing criteria, ongoing legal actions can create uncertainty and potential future regulatory focus.

What Investors Should Do

1. Monitor the legal proceedings against Wilmington Trust, National Association closely.
2. Review the attached Reports on Assessment and Attestation Reports for Servicing Participants.
3. Assess the potential impact of the legal action on the trust's structure and future securitization activities.

Key Dates

• 2025-12-31: Fiscal Year End — Marks the end of the reporting period for the 10-K filing.
• 2026-02-03: Legal Action Initiated — Investors filed a lawsuit against the owner trustee, Wilmington Trust, National Association, alleging breaches of contract and duties, which introduces significant legal risk.

Glossary

Securitization Entity

A legal entity created to pool assets and issue securities backed by the cash flows from those assets. (Santander Drive Auto Receivables Trust 2023-1 is a securitization entity holding auto loan receivables.)

Owner Trustee

A trustee appointed to hold legal title to the assets in a securitization trust on behalf of the certificate holders. (Wilmington Trust, National Association is the owner trustee and is currently facing a lawsuit from investors.)

Waterfall Payments

A priority system for distributing cash flows generated by the securitized assets to different classes of investors. (Allegations in the lawsuit include breaches of duties related to the proper distribution of these payments.)

Servicing Criteria

A set of standards and requirements that servicers must adhere to when managing the underlying assets of a securitization. (Servicing Participants reported no material noncompliance with these criteria, indicating operational stability in servicing.)

Regulation AB

SEC rules governing the registration, reporting, and disclosure requirements for asset-backed securities. (The filing references specific items from Regulation AB concerning servicing compliance and affiliations.)

Year-Over-Year Comparison

As this is the first 10-K filing for Santander Drive Auto Receivables Trust 2023-1, a direct comparison of key metrics to a previous year's filing is not applicable. However, the introduction of a significant legal proceeding against the owner trustee on February 3, 2026, represents a new and material risk factor that was not present in prior periods or initial offerings.

Filing Documents

• d139448d10k.htm (10-K) — 48KB
• d139448dex311.htm (EX-31.1) — 5KB
• d139448dex331.htm (EX-33.1) — 81KB
• d139448dex332.htm (EX-33.2) — 23KB
• d139448dex341.htm (EX-34.1) — 8KB
• d139448dex342.htm (EX-34.2) — 7KB
• d139448dex351.htm (EX-35.1) — 6KB
• d139448dex352.htm (EX-35.2) — 6KB
• g139448g29j77.jpg (GRAPHIC) — 4KB
• g139448g35m55.jpg (GRAPHIC) — 4KB
• g139448g48k64.jpg (GRAPHIC) — 4KB
• g139448g75k73.jpg (GRAPHIC) — 3KB
• g79474g0325125846589.jpg (GRAPHIC) — 5KB
• g79474g0325125846836.jpg (GRAPHIC) — 1KB
• g79474g23t93.jpg (GRAPHIC) — 2KB
• g79474g62r59.jpg (GRAPHIC) — 3KB
• 0001193125-26-126642.txt ( ) — 221KB

Risk Factors

Risk Factors Item 1C Cybersecurity Item 2

Legal Proceedings

Legal Proceedings Item1B. Unresolved Staff Comments Nothing to report. Item4. Mine Safety Disclosures Not applicable. Substitute information provided in accordance with General Instruction J to Form 10-K: Item1112(b) of Regulation AB. Significant Obligors of Pool Assets (Financial Information) Nothing to report. Item1114(b)(2) of Regulation AB.Credit Enhancement and Other Support, Except for Certain Derivatives Instruments (Information Regarding Significant Enhancement Providers) Nothing to report. Item1115(b) of Regulation AB. Certain Derivatives Instruments (Financial Information) Nothing to report. Item1117 of Regulation AB. Legal Proceedings. Wilmington Trust, National Association ("WTNA"), as the owner trustee, has provided the following information: On February 3, 2026, certain investors served WTNA with a civil complaint, filed in the Supreme Court of the State of New York, County of New York, for an unspecified amount of damages arising from alleged breaches of contract and duties related to WTNA's roles as custodian and indenture trustee for certain Tricolor Holdings, LLC asset-backed securitization transactions. The plaintiffs generally assert causes of action related to WTNA's purported failure to comply with certain provisions related to waterfall payments, servicing transition costs and post-event of default duties and related to WTNA's purported failure to perform certain actions as custodian with respect to the related receivables. WTNA intends to vigorously defend itself against this legal action. 2 PART II The following items have been omitted in accordance with General Instruction J to Form 10-K: Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Item 6 [Reserved] Item 7

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations Item 7A

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk Item 8

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data Item 9 Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Item 9A

Controls and Procedures

Controls and Procedures Item9B. Other Information None. Item9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections Not applicable. 3 PART III The following items have been omitted in accordance with General Instruction J to Form 10-K: Item 10 Directors, Executive Officers, and Corporate Governance Item 11

Executive Compensation

Executive Compensation Item 12

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Item 13 Certain Relationships and Related Transactions, and Director Independence Item 14 Principal Accountant Fees and Services Substitute information provided in accordance with General Instruction J to Form 10-K: Item1119 of Regulation AB. Affiliations and Certain Relationships and Related Transactions Information required by Item 1119 of Regulation AB has been omitted from this report on Form 10-K in reliance on the Instruction to Item 1119. Item1122 of Regulation AB. Compliance with Applicable Servicing Criteria Each of Santander Consumer USA Inc., Santander Bank, N.A. and Citibank, N.A. (each, a "Servicing Participant") have been identified by the issuing entity as parties participating in the servicing function with respect to the pool assets held by the issuing entity. Each of the Servicing Participants has completed a report on an assessment of compliance with the servicing criteria applicable to it (each, a "Report on Assessment"), which Reports on Assessment are attached as exhibits to this Form 10-K. In addition, each of the Servicing Participants has provided an attestation report (each, an "Attestation Report") by one or more registered public accounting firms, which reports are also attached as exhibits to this Form 10-K. None of the Reports on Assessment or the related Attestation Reports has identified any material instances of noncompliance with the servicing criteria described in the related Report on Assessment as being applicable to such Servicing Participant. Item1123 of Regulation AB. Servicer Compliance Santander Consumer USA Inc. and Santander Bank, N.A. have each been identified by the issuing entity as the servicers with respect to the asset pool held by the issuing entity. Each of Santander Consumer USA Inc. and Santander Bank, N.A. have completed a statement of compliance with applicable servicing criteria (a "

SIGNATURES

SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 26, 2026 SANTANDER DRIVE AUTO RECEIVABLES LLC, as depositor By: /s/ Corey Henry Name: Corey Henry Title: President and Chief Executive Officer (senior officer in charge of securitization of the depositor) 7

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View this 10-K filing on SEC EDGAR