UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2022 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from
to |
333-233424-01
(Commission File Number of Issuing Entity)
Volkswagen Auto
Loan Enhanced Trust 2020-1
(Exact name of Issuing Entity as specified in its
charter)
Central Index Key Number of Issuing Entity: 0001809291
Volkswagen Auto
Lease/Loan Underwritten Funding, LLC
(Exact name of Depositor as specified in its charter)
Central Index Key Number of Depositor: 0001182534
VW Credit, Inc.
(Exact name of Sponsor as specified in its charter)
Central Index Key Number of Securitizer: 0000833733
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State of Delaware |
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85-6192834 |
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(State or other jurisdiction of |
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(I.R.S. Employer |
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incorporation or organization of |
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Identification No. of Registrant) |
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Registrant) |
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2200 Woodland Pointe Avenue |
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20171 |
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Herndon, Virginia |
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(Zip Code of Registrant) |
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(Address of principal executive offices of Registrant) |
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(703) 364-7000
(Registrant’s telephone number, including
area code)
Securities registered pursuant to Section 12(b) of the Securities
Exchange Act:
| Title of each class | |
Trading Symbol(s) | |
Name of each exchange on which registered |
| None | |
N/A | |
None |
Securities
registered pursuant to Section 12(g) of the Securities Exchange Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act. ¨ Yes x No
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. x Yes ¨ No
Indicate by check mark whether the registrant has submitted electronically
every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during
the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
x Yes ¨ No
Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions
of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging
growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer: ¨ |
Accelerated filer: ¨ |
| Non-accelerated filer: x |
Smaller reporting company: ¨ |
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Emerging growth company: ¨ |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the
registered public accounting firm that prepared or issued its audit report. ¨ Not
Applicable
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Securities Exchange Act). Yes ¨ No x
State the aggregate market value of the voting and non-voting common
equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked
price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. None
Documents incorporated by reference: None
FORM 10-K
PART 1
THE FOLLOWING ITEMS HAVE BEEN OMITTED IN ACCORDANCE WITH GENERAL
INSTRUCTION J(1) TO FORM 10-K:
| (D) | Item 3 |
Legal Proceedings. |
Item 1B. Unresolved Staff Comments.
Not Applicable.
Item 4. Mine Safety Disclosures.
Not Applicable.
PART II
THE FOLLOWING ITEMS HAVE BEEN OMITTED IN ACCORDANCE WITH GENERAL
INSTRUCTION J(1) TO FORM 10-K:
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(A) |
Item 5 |
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. |
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(B) |
Item 6 |
Selected Financial Data. |
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(C) |
Item 7 |
Management’s
Discussion and Analysis of Financial Condition and Results of Operations. |
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(D) |
Item 7A |
Quantitative and
Qualitative Disclosures About Market Risk. |
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(E) |
Item 8 |
Financial Statements
and Supplementary Data. |
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(F) |
Item 9 |
Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure. |
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(G) |
Item 9A |
Controls and Procedures. |
Item 9B. Other Information.
None.
PART III
THE FOLLOWING ITEMS HAVE BEEN OMITTED IN ACCORDANCE WITH GENERAL
INSTRUCTION J(1) TO FORM 10-K:
| (A) | Item 10 |
Directors, Executive Officers and Corporate Governance. |
| (B) | Item 11 |
Executive Compensation. |
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(C) |
Item 12 |
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
| (D) | Item 13 |
Certain Relationships and Related Transactions, and Director Independence. |
| (E) | Item 14 |
Principal Accountant Fees and Services. |
PART IV
Item 15. Exhibits and Financial Statement Schedules.
(2) Not applicable.
(3) The exhibits filed in response to Item
601 of Regulation S-K are listed in the Exhibit Index.
| (b) | The exhibits filed in response to Item 601 of Regulation S-K are listed in the Exhibit Index. |
Item 16. Form 10-K Summary.
Not Applicable.
SUBSTITUTE INFORMATION PROVIDED IN ACCORDANCE WITH GENERAL INSTRUCTION
J(2) TO FORM 10-K:
Item 1112(b) of Regulation AB. Significant Obligors of Pool
Assets (Financial Information).
Not Applicable.
Item 1114(b)(2) of Regulation AB. Credit Enhancement and Other
Support, Except for Certain Derivatives Instruments (Information Regarding Significant Enhancement Providers).
Not Applicable.
Item 1115(b) of Regulation AB. Certain Derivatives Instruments
(Financial Information).
Not Applicable.
Item 1117 of Regulation AB. Legal Proceedings.
Volkswagen Aktiengesellschaft (“Volkswagen AG”) and affiliates
of Volkswagen AG (collectively, “Volkswagen Group Companies”), including VW Credit, Inc. (“VW Credit”), have
been the subject of intense scrutiny, ongoing investigations (civil and criminal) and civil litigation relating to TDI diesel engines.
Volkswagen AG and other Volkswagen Group Companies have received subpoenas and inquiries from state attorneys general and other governmental
and regulatory authorities and are responding to such investigations and inquiries, including in areas relating to securities, financing
and tax.
One such legal action to which VW Credit was subject, or to which certain
other Volkswagen Group Companies are still subject, is a civil action brought by the SEC pursuant to a complaint filed in the U.S. District
Court for the Northern District of California on March 14, 2019. The complaint alleged that VW Credit, its indirect 100% parent,
Volkswagen AG, an affiliate, Volkswagen Group of America Finance, LLC, and the former Chief Executive Officer of Volkswagen AG, Martin
Winterkorn, violated certain provisions of the U.S. federal securities laws by selling certain bonds and asset-based securities without
disclosure concerning the existence of defeat devices, as defined under U.S. law, in certain diesel vehicles, and related exposures.
On August 20, 2020, the U.S. District Court for the Northern District
of California granted in part the Volkswagen defendants’ motion to dismiss the complaint, dismissing all claims against VW Credit
related to its issuance of automotive asset-backed securities (“ABS”). With respect to VW Credit, the court held that the
SEC’s claims had already been released by virtue of Volkswagen AG, Volkswagen Group of America Finance, LLC and VW Credit’s
settlement with the U.S. Department of Justice for claims made under the Financial Institutions Reform, Recovery and Enforcement Act,
12 U.S.C. § 1833a, related to VW Credit and the ABS.
On September 4, 2020, the SEC filed an amended complaint and removed
its claims against VW Credit. On December 7, 2020, the Volkswagen Group Companies entities named in the amended complaint filed an
answer to the operative complaint denying liability for the claims asserted by the SEC and raising affirmative defenses. To date, the
SEC has not sought to pursue a direct appeal as to the claims against VW Credit; however, the SEC may attempt to appeal after the resolution
of all remaining claims in the amended complaint. The other Volkswagen Group Companies named in the amended complaint intend to continue
to contest the claims asserted in the SEC’s amended complaint and the relief sought by the SEC.
Indenture Trustee Litigation
Deutsche Bank Trust Company Americas, as the Indenture Trustee, has
provided the following information for inclusion in this report on Form 10-K:
Deutsche Bank Trust Company Americas (“DBTCA”) and Deutsche
Bank National Trust Company (“DBNTC”) have been sued by investors in civil litigation concerning their role as trustees of
certain residential mortgage-backed securities (“RMBS”) trusts.
On June 18, 2014, a group of investors, including funds managed
by Blackrock Advisors, LLC, PIMCO-Advisors, L.P., and others, filed an action against DBNTC and DBTCA in New York State Supreme Court
alleging that DBNTC and DBTCA failed to perform purported duties, as trustees for 544 private-label RMBS trusts, to enforce breaches of
representations and warranties as to mortgage loans held by the trusts and to enforce breaches by servicers of their mortgage loan servicing
obligations for the trusts. During the course of the litigation, plaintiffs dismissed the case from New York State Supreme Court and refiled
two separate cases, one in the U.S. District Court for the Southern District of New York (the “BlackRock SDNY Case”) and the
other in the Superior Court of California, Orange County (the “BlackRock California Case”). Pursuant to a settlement among
the parties, the BlackRock SDNY Case was dismissed on December 6, 2018, and the BlackRock California Case was dismissed on January 11,
2019.
On September 27, 2017, DBTCA was added as a defendant to a case
brought by certain special purpose entities including Phoenix Light SF Limited in the U.S. District Court for the Southern District of
New York, in which the plaintiffs previously alleged incorrectly that DBNTC served as trustee for all 43 of the trusts at issue. On September 27,
2017, plaintiffs filed a third amended complaint that names DBTCA as a defendant in addition to DBNTC. DBTCA serves as trustee for one
of the 43 trusts at issue. DBNTC serves as trustee for the other 42 trusts at issue. Plaintiffs’ third amended complaint brings
claims for violation of the U.S. Trust Indenture Act of 1939 (“TIA”); breach of contract; breach of fiduciary duty; negligence
and gross negligence; violation of New York’s Streit Act; and breach of the covenant of good faith. However, in the third amended
complaint, plaintiffs acknowledge that, before DBTCA was added to the case, the court dismissed plaintiffs’ TIA Act claims, negligence
and gross negligence claims, Streit Act claims, claims for breach of the covenant of good faith, and certain theories of plaintiffs’
breach of contract claims, and plaintiffs only include these claims to preserve any rights on appeal. Plaintiffs allege damages of “hundreds
of millions of dollars.” On November 13, 2017, DBNTC and DBTCA filed an answer to the third amended complaint. On December 7,
2018, DBNTC and DBTCA filed a motion for summary judgment. Also on December 7, 2018, plaintiffs, jointly with Commerzbank AG (see
description of Commerzbank case below), filed a motion for partial summary judgment. On October 27, 2021, DBNTC and DBTCA filed a
supplemental motion for summary judgment relating to plaintiffs’ standing. On February 8, 2022, the court issued an order in
which it granted DBNTC and DBTCA’s supplemental motion for summary judgment, granted in part DBNTC and DBTCA’s initial motion
for summary judgment, and denied plaintiffs’ motion for partial summary judgment. As a result of that order, all of plaintiffs’
claims were dismissed with prejudice. On March 10, 2022, plaintiffs filed a notice of appeal to the United States Court of Appeals
for the Second Circuit with respect to the court’s orders on the motions to dismiss and for summary judgment.
On November 30, 2017, DBTCA was added as a defendant to a case
brought by Commerzbank AG (“Commerzbank”) in the U.S. District Court for the Southern District of New York, in which Commerzbank
previously alleged incorrectly that DBNTC served as trustee for all 50 of the trusts at issue. On November 30, 2017, Commerzbank
filed a second amended complaint that names DBTCA as a defendant in addition to DBNTC. DBTCA serves as trustee for 1 of the 50 trusts
at issue. DBNTC serves as trustee for the other 49 trusts at issue. Commerzbank’s second amended complaint brings claims for violation
of the TIA; breach of contract; breach of fiduciary duty; negligence; violation of the Streit Act; and breach of the covenant of good
faith. However, in the second amended complaint, Commerzbank acknowledges that, before DBTCA was added to the case, the court dismissed
Commerzbank’s TIA claims for the trusts governed by pooling and servicing agreements, as well as its Streit Act claims and claims
for breach of the covenant of good faith, and Commerzbank only includes these claims to preserve any rights on appeal. The second amended
complaint alleges that DBNTC and DBTCA caused Commerzbank to suffer “hundreds of millions of dollars in losses,” but the complaint
does not include a demand for money damages in a sum certain. On January 29, 2018, DBNTC and DBTCA filed an answer to the second
amended complaint. On December 7, 2018, DBNTC and DBTCA filed a motion for summary judgment. Also on December 7, 2018, Commerzbank,
jointly with the Phoenix Light plaintiffs, filed a motion for partial summary judgment. On February 8, 2022, the court issued an
order in which it granted in part DBNTC and DBTCA’s motion for summary judgment and denied plaintiffs’ motion for partial
summary judgment. As a result of that order, many of plaintiffs’ claims and theories were dismissed with prejudice. Discovery is
ongoing.
On December 30, 2015, IKB International, S.A. in Liquidation
and IKB Deutsche Industriebank A.G. (collectively, “IKB”), as an investor in 37 RMBS trusts, filed a summons with notice in
the Supreme Court of the State of New York, New York County, against DBNTC and DBTCA as trustees of the trusts. On May 27, 2016, IKB
served its complaint asserting claims for breach of contract, breach of fiduciary duty, breach of duty to avoid conflicts of interest,
violation of the Streit Act, violation of the TIA, violation of Regulation AB, and violation of Section 9 of the Uniform Commercial
Code. IKB alleges that DBNTC and DBTCA are liable for over U.S. $268 million in damages. On October 5, 2016, DBNTC and DBTCA, together
with several other trustees defending lawsuits by IKB, filed a joint motion to dismiss. On January 6, 2017 and June 20, 2017, IKB
voluntarily dismissed with prejudice all claims as to seven trusts. On January 27, 2021, the court granted in part and denied in
part DBNTC and DBTCA’s motion to dismiss. The court granted the motion to dismiss with respect to IKB’s claims for violations
of the Streit Act, Regulation AB, and Section 9 of the Uniform Commercial Code, as well as certain aspects of IKB’s claims
for breach of contract, breach of fiduciary duty, and violation of the TIA. The court denied the remainder of the motion to dismiss. IKB’s
remaining claims for breach of contract, breach of fiduciary duty, breach of duty to avoid conflicts of interest, and violation of the
TIA will proceed. On May 10, 2021, DBNTC and DBTCA filed a notice of appeal with the New York Supreme Court Appellate Division, First
Department, regarding certain aspects of the court’s order on the motion to dismiss. On May 20, 2021, IKB filed a notice
of cross appeal with respect to other aspects of that order. On August 30, 2022, the New York Supreme Court, Appellate Division,
First Department affirmed in part and reversed in part the court’s order on the motion to dismiss. On November 10, 2022, the
First Department granted DBNTC and DBTCA’s motion for leave to appeal to the Court of Appeals, and denied IKB’s separate motion
for reargument and leave to appeal. On June 2, 2021, IKB filed a motion for re-argument regarding certain aspects of the court’s
order on the motion to dismiss, which the court denied on August 3, 2021. On May 13, 2021, DBNTC and DBTCA filed an answer to
the complaint. On October 28, 2021, the parties filed a stipulation, voluntarily dismissing with prejudice all claims as to seven
additional trusts. On December 29, 2021, the parties filed a stipulation, voluntarily dismissing with prejudice all claims as to
one additional trust. On April 22, 2022, the parties filed a stipulation, voluntarily dismissing with prejudice all claims as to
17 certificates at issue, including all claims as to 5 trusts. On February 28, 2023, the parties filed a stipulation, voluntarily
dismissing with prejudice all claims as to two trusts, leaving 15 trusts at issue. Discovery is ongoing.
It is DBTCA’s belief that it has no pending legal proceedings
(including, based on DBTCA’s present evaluation, the litigation disclosed in the foregoing paragraphs) that would materially affect
its ability to perform its duties under the related servicing agreement for this transaction.
Except as described above, no legal proceedings are pending against
any of VW Credit, Inc. (in its capacity as the sponsor (the “Sponsor”), in its capacity as an originator contemplated
by Item 1110(b) of Regulation AB (the “Originator”), in its capacity as servicer (the “Servicer”) and in
its capacity as administrator of Volkswagen Auto Loan Enhanced Trust 2020-1 (the “Issuing Entity”)), Volkswagen Auto Lease/Loan
Underwritten Funding, LLC (the “Depositor”), Deutsche Bank Trust Company Americas (the “Indenture Trustee”), Citicorp
Trust Delaware, National Association (the “Issuer Delaware Trustee”), Citibank, N.A. (the “Owner Trustee”), or
the Issuing Entity or of which any property of the foregoing is the subject that are or would be material to holders of the asset-backed
notes (the “Notes”) or the asset-backed certificate (the “Certificate”). No such proceedings are known to be contemplated
by governmental authorities.
Item 1119 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.
Item 1122 of Regulation AB. Compliance with Applicable Servicing
Criteria.
The Servicer and the Indenture Trustee (collectively, the “Servicing
Parties”) have each been identified by the Depositor as parties participating in the servicing function with respect to the asset
pool held by the Issuing Entity. Each of the Servicing Parties has completed a report on an assessment of compliance with the servicing
criteria set forth in paragraph (d) of Item 1122 of Regulation AB applicable to it (each, a “Servicing Assessment Report”),
which Servicing Assessment Reports are attached as exhibits to this Form 10-K. In addition, each of the Servicer and the Indenture
Trustee has provided an attestation report (each, an “Attestation Report”) by a registered public accounting firm, which reports
are also attached as exhibits to this Form 10-K. Neither the Indenture Trustee’s Servicing Assessment Report nor the Indenture
Trustee’s Attestation Report has identified any material instance of noncompliance with the servicing criteria applicable to the
Indenture Trustee.
The Servicer complied in all material respects with the servicing criteria
applicable to it.
Item 1123 of Regulation AB. Servicer Compliance Statement.
The Servicer has completed a statement of compliance with its activities
during the reporting period and of its performance under the applicable servicing agreement (a “Compliance Statement”), signed
by an authorized officer of the Servicer. The Compliance Statement is attached as Exhibit 35.1 to this Form 10-K.
EXHIBIT INDEX
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Depositor has duly caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
March 30, 2023
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VOLKSWAGEN AUTO LOAN ENHANCED TRUST 2020-1 |
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By: VW Credit, Inc., as Servicer |
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By: |
/s/ Garett Miles |
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Garett Miles |
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Head of Securitization and Assistant Treasurer |
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(senior officer in charge of the servicing function) |
