Attorneys for Reagor-Dykes and Ford Credit spent hours in U.S. Bankruptcy Court Tuesday arguing essentially the future of the Auto Group. Ford Credit filed a motion to allow it to take possession of vehicles and other collateral, effectively closing the business.
An attorney for Reagor-Dykes explained why the judge should rule against the motion, which would lead to liquidation. He detailed a reorganization plan, led by the McDougal-Dykes-Ewing group, to infuse capital into the company and help it emerge from bankruptcy. If approved, it would be likely be executed April 1. Ford Credit described the plan Tuesday as "too little, too late".
"We can't go on forever," Ford Credit's attorney said, noting five months have passed since bankruptcy filing. He dubbed it a "Hail Mary" and "pie in the sky" because the McDougal-Dykes-Ewing group isn't yet a legal entity. Ford Credit claims the motion should be granted because, although a plan was filed Monday, there is still no disclosure statement, an interim financing order was only filed Tuesday, and Reagor-Dykes does not have written lending commitments. He said financing to exit from bankruptcy is not in place and the group has yet to seek approval from Ford, GM, Toyota and Mitsubishi to grant dealership agreements.
Ford Credit's attorney pointed to a sale of the Auto Group, which fell apart in late November. He said several interested parties, after "due diligence" greatly reduced potential bids. After the failed sale, Reagor-Dykes' team "pivoted" to reorganization.
Reagor-Dykes' attorney explained how reorganization provides the most value to everyone involved: creditors, consumers, current and former employees and the Lubbock community as a whole. The attorney labeled Ford Credit's liquidation approach as a "scorched Earth" plan, saying Reagor-Dykes has done everything Ford has asked it since the bankruptcy filing Aug. 1.
Judge Robert Jones will take the motion under advisement. He is expected to rule on the motion to take vehicles and collateral in the next week or so.
Meanwhile, both sides will be in court Wednesday afternoon to discuss a short-term financial plan. While it ties in to the larger reorganization plan, the Auto Group only has money to operate for the next few days. Up to this point, multiple hearings have approved Reagor-Dykes' use of Ford Credit's cash collateral. This has kept dealerships open with bare-bones staffing, with budgets and cash use extended for weeks at a time.
Reagor-Dykes is not seeking cash collateral use and Ford Credit has made it clear it would not consent. Instead, the Auto Group is requesting to use $1 million provided by Rick Dykes and Bart Reagor, then up to $3.75 million loaned from International Bank of Commerce.
Dykes would provide $875,000, Reagor $125,000. $125,000 from each individual would come from a retainer earlier paid to the initial legal team that represented Reagor-Dykes in this bankruptcy case.
Rick Dykes was in the packed courtroom, as were several either current or former Reagor-Dykes employees. Bart Reagor was not present. Attorneys representing both principals addressed the judge on the motion and the larger reorganization plan.
An attorney representing Rick Dykes made it clear Dykes is not using the reorganization plan simply for his own benefit. He said Dykes did not have a day-to-day role at the Auto Group. But, since the bankruptcy filing, "has worked daily without compensation" to maximize value to creditors, consumers, employees and the Lubbock community.
He said Dykes pledged a significant portion of his own funds and used personal relationships to bring Marc McDougal and Fin Ewing to the reorganization group. The chief restructuring officer overseeing Reagor-Dykes operations testified the fact that McDougal, a prominent Lubbock developer and former mayor, and Ewing, a successful North Texas third-generation auto dealer, want to be involved shows "they see a lot of potential".
Ford Credit criticized an earlier memo providing an overview of reorganization issued in late November because it included releases of all parties involved. Dykes' attorney said this was not included to give a free pass to any individual or entity, but so that the re-organized dealership could go to the public and show all issues have been resolved, helping re-ignite car sales.
JAN. 7: Reagor-Dykes files reorganization plan
JAN. 7: 'Reagor-Dykes is not dead', Auto Group files response to Ford Credit's demands
JAN. 4: With no reorganization plan yet filed, Ford Credit seeks to take possession of Reagor-Dykes vehicles
JAN. 3: Lender asks bankruptcy court to force Reagor-Dykes legal team to produce documents
DEC. 26: UPDATE: Court allows Ford Credit lawsuit to proceed against Bart Reagor, Rick Dykes
DEC. 12: Slow progress reported on Reagor-Dykes customers' TT&L, trade-ins
NOV. 29: McDougal, Ewing and Dykes lead group to purchase Reagor-Dykes assets
NOV. 21 Former Reagor-Dykes CFO requests change of venue in lawsuit
NOV. 20: Toyota, GM file objections in Reagor-Dykes bid process
NOV. 14: State may extend titles for some Reagor-Dykes customers
NOV. 2: Five more Reagor-Dykes entities petition for bankruptcy
OCT. 29: Reagor-Dykes TT&L, trade-in issues remain unresolved; progress reported with some lenders
OCT. 29: Bart Reagor, Reagor Auto Mall claim First Bank & Trust party at fault
OCT. 29: Vista Bank asks to recoup funds in Reagor-Dykes accounts
OCT. 18: No resolution yet on Reagor-Dykes customers' unpaid TT&L, trade-in liens
OCT. 17: More lenders object to Reagor-Dykes' request for TT&L, trade-in payment
OCT. 16: U.S. Bank objects to Reagor-Dykes request for lenders to pay TT&L, trade-ins
OCT. 15: Compromise on vehicles in First Bank & Trust lawsuit v. Reagor Auto Mall
OCT. 15: Judge approves sale of Reagor-Dykes plane; Wells Fargo objects to portion of TT&L motion
OCT. 12: Ford Credit supports part of Reagor-Dykes' request for lenders to pay TT&L, trade-ins
OCT. 12: FirstCapital files counterclaim, motion to dismiss
OCT. 10: Reagor-Dykes aircraft to be sold, pending court approval
OCT. 10: Several filings in Reagor-Dykes bankruptcy case
OCT. 1: KamKad, Reagor-Dykes execute purchase agreement
SEPT. 24: FirstCapital Bank requests First Bank & Trust lawsuit against it, Reagor-Dykes, others move to federal court
SEPT. 21: Judge sets schedule, trial date in Vista Bank v FirstCapital Bank lawsuit
SEPT. 21: Former Reagor-Dykes CFO denies late payments, says Vista Bank attacked him, his family
SEPT. 20: Vista Bank sues former Reagor-Dykes CFO, claims loan default
SEPT. 19: Texas DMV: Reagor-Dykes should promptly resolve title issues
SEPT. 19: Brad, Kenneth Burgess file motion to dismiss Vista Bank lawsuit
SEPT. 18: First Capital Bank files motion to dismiss lawsuit
SEPT. 18: Court approves bid process for Reagor-Dykes Auto Group, extends use of cash collateral
SEPT. 17: Ford Credit, GM object to certain aspects of proposed Reagor-Dykes sale
SEPT. 14: Judge sets trial date in Ford Credit lawsuit vs. Reagor-Dykes
SEPT. 14: Reagor denies Ford Credit's claim vehicles sold out of trust
SEPT. 13: Dykes: Former Reagor-Dykes CFO admits he provided false info to Ford Credit
SEPT. 11: Reagor-Dykes Auto Group requests court to allow sale of company
SEPT. 4: Reagor-Dykes Auto Group establishes process to resolve customer problems
AUG. 31: International Bank of Commerce asks for court to allow it to foreclose on Reagor-Dykes dealerships
AUG. 31: More Reagor-Dykes companies, co-owners may soon file for chapter 11
AUG. 30: Court extends Reagor-Dykes employment of CRO; officer discusses potential dealership buyers
AUG. 29 : International Bank of Commerce asks for loan payment in Reagor-Dykes case
AUG. 29: Ford Credit objects to Reagor-Dykes earlier legal team
AUG. 27: Vista Bank doubles relief request in new federal suit against FirstCapital Bank
AUG. 25: Reagor-Dykes chief restructuring officer hires new legal team
AUG. 25: GM proceeding with termination of Reagor-Dykes Floydada
AUG. 23: Landlords demand rent for Reagor-Dykes dealerships in Lubbock, Plainview
AUG. 20: Ford Credit moves ahead with suit against Reagor, Dykes, some R-D companies
AUG. 18: Reagor-Dykes bankruptcy case: Read court order following Aug. 16 hearing
AUG. 17: Auto dealer claims Reagor-Dykes owes $513,000, vehicles may be in consumers' possession
AUG. 16: Vista Bank sues FirstCapital for $6 million, claims Dykes helped perpetrate check kiting scheme
AUG. 16: Bankruptcy court allows Reagor-Dykes continued use of cash collateral, hiring of CRO
AUG. 15: Reagor-Dykes Auto Group issues written apology
AUG. 14: Loss of Reagor-Dykes Chevrolet in Floydada a potential financial pitfall for city
AUG. 14: Vehicle auction company claims Reagor-Dykes owes it $687,000
AUG. 14: Ford Credit claims Reagor-Dykes is not following court orders; court grants extension to file docs
AUG. 13: U.S. Trustee opposes Reagor-Dykes request to hire chief restructuring officer
AUG. 10: Ford Credit: Reagor-Dykes fraud may be among largest of its type in U.S. history; GM files to terminate Floydada dealership
AUG. 9: Reagor-Dykes questions former CFO’s actions; Contractor claims $700,000 due now
AUG. 7: Former Reagor-Dykes employees claim they were not paid
AUG. 6: Customers concerned over Reagor-Dykes 'unwinding' process
AUG. 6: Ford suit against Reagor-Dykes on hold while bankruptcy case proceeds
AUG. 3: Judge approves Reagor-Dykes employee pay
AUG. 2: Mayor: Downtown Lubbock growth to remain strong regardless of Reagor-Dykes future
INITIAL STORY: Ford Motor Credit sues Reagor-Dykes; R-D files for chapter 11 bankruptcy