Federal judge approves final Reagor-Dykes liquidation plan - FOX34 Lubbock

Federal judge approves final Reagor-Dykes liquidation plan

Posted: Updated:

Nearly 2 years after Reagor-Dykes filed for Chapter 11 Bankruptcy, the businesses it defrauded in one of the largest schemes of its kind in history can finally expect to see some of the money they are owed by the former auto group.

In a confirmation hearing on Wednesday via video conference, Federal Bankruptcy Judge Robert Jones approved the final liquidation plan to pay off creditors. 

This includes some of its largest investors like Ford Credit, GM Financial and a couple banks. 

The decision comes after failed attempts to re-group and re-build what remained of the estate.

The current plan contains several modifications from original filings. According to court documents, 21 total objections were filed to prior versions.

The final objection, from U.S. Bank, was dropped ahead of Wednesday's hearing.

Its representative citing this latest option was the best path moving forward.  Ashley Ellis, legal counsel for the estate, said it's pleased to have everyone on board.

Now the remaining dealerships will be sold off, and the assets distributed in order of priority. Ford Credit gets all the proceeds from selling its collateral.

GM will get up to $3.1 million from a pending suit it is working with the estate on against Aim Bank.

Vista Bank and First Bank and trust won't get payments under the plan after settlements they cut with the estate earlier this year.

First Capital Bank and Aim Bank are still eligible to get a distribution. All other claims, come after that.

Judge Jones expressed concern about how much money that leaves for smaller lenders.

Co-owner Bart Reagor is also entitled to a share of the money, but only until after all the creditors are paid. A new provision blocks any further lawsuit against the estate. 

It also absolves co-owner Rick Dykes from any liability. Although, he will have to pay upfront money to resolve consumer's tax, title, and license problems and give up his claim to nearly $2 million he loaned to the estate. Court records show there's still more than a hundred customers with outstanding TT & L problems.

These settlements do not prevent criminal charges from anyone connected to the failed Auto Group. As of February, 13 former associates have pleaded guilty to related fraud charges. 

Powered by Frankly
All content © Copyright 2000 - 2020 RAMAR. All Rights Reserved.
For more information on this site, please read our Privacy Policy, and Terms of Service, and Ad Choices.