Reagor-Dykes owners make first appearance in federal bankruptcy

Reagor-Dykes owners make first appearance in federal bankruptcy court

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Bart Reagor walking out of Lubbock Federal Court Aug. 3 Bart Reagor walking out of Lubbock Federal Court Aug. 3
LUBBOCK, Texas -

Money set aside by Reagor-Dykes executives has been approved by a U.S. District Judge and has since been distributed to employees as of Friday afternoon.

According to employees, those checks were supposed to be received Wednesday, August 1.

During the first bankruptcy hearing, legal counsel for Reagor-Dykes said Bart Reagor and Rick Dykes placed $468,000 into a bank account to make payroll. During the hearing, Judge Robert Jones approved $350,000 of that money to pay employees.

Also during the hearing, Reagor-Dykes attorney David Langston argued to allow the business to continue on a bare-bones budget for the next 30 days. Court filings indicate the plan would use gross profits to cover necessary expenses such as payroll, utilities, taxes, repairs, and maintenance. The proposal would also operate on a cash basis to facilitate normal business. 

Ford representatives have reviewed dealership operations. Regarding the possibility of continuing vehicle sales, Ford representatives said this could happen but with the requirement that a cashier's check to be presented for purchase in order to reduce the opportunity of losing collateral. If approved, co-owners Reagor and Dykes would not be turning a profit.

Reagor-Dykes agreed to Ford's request that all demo cars which have been loaned to employees or other businesses or organizations, including Texas Tech, would have to be returned within 24 hours.

Representatives for Reagor-Dykes discussed possibly hiring a fraud accountant to figure out how there are major discrepancies in reported sales and inventory alleged in Ford Motor Credit's lawsuit during what Langston described as a "surprise audit" in July, when Reagor was on vacation. This came after Ford gave strong ratings to Reagor-Dykes in previous audits. 

Representatives also discussed the hiring of a financial consultant to determine how to sell some of its dealerships.

Kieth Livingston, an attorney for Ford Motor Credit, said this is the largest bankruptcy he has seen in more than three decades of practicing law, with the alleged amount owed around $116 million. 

There is another hearing set for Aug. 16th in order to review the progress in the bankruptcy proceedings. 

EARLIER STORY: Judge approves Reagor-Dykes employee pay - click to read several court filings made Friday
THURSDAY: Sources: Reagor-Dykes cannot make payroll
WEDNESDAY: Ford Motor Credit sues Reagor-Dykes; R-D files for chapter 11 bankruptcy

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