UPDATED: Reagor-Dykes questions former CFO’s actions; Contractor

UPDATED: Reagor-Dykes questions former CFO’s actions; Contractor claims $700,000 due now

Posted: Updated:
Shane Smith, photo from Reagor Dykes website Shane Smith, photo from Reagor Dykes website
Bart Reagor walking out of Lubbock Federal Court Aug. 3 Bart Reagor walking out of Lubbock Federal Court Aug. 3
LUBBOCK, Texas -

Posted 6:37 p.m. - We have another update on a court filing made late Thursday afternoon in U.S. Bankruptcy Court regarding Reagor-Dykes Auto Group. Universal Underwriters Service Corporation objects to a part of Reagor-Dykes’ motion to use cash collateral. 

According to court documents, Reagor-Dykes sells various Universal products, including contracts that cover vehicle service, debt cancellation, theft deterrence, road hazard protection, maintenance and limited warranties.

Universal, headquartered in Overland Park, Kansas, claims under its agreement with Reagor-Dykes, the company must pay Universal within 10 days of the close of the month for all products sold. Universal claims it is now owed $700,000. The filing states this money is not Reagor-Dykes’ to hold or use for any other purpose. 

The filing states Universal does not object to Reagor-Dykes’ agreement with Ford Motor Credit to use Ford’s cash collateral as has been outlined in court last week and previous filings. But Universal has objection with use of cash that is due to it — $700,000. Three of today’s filings are at the bottom of this article.


posted 3:08 p.m. - Reagor-Dykes Auto Group Thursday afternoon filed a request in U.S. Bankruptcy Court for an emergency hearing to hire a chief restructuring officer (CRO). As detailed in the entry below from earlier today, the company plans to hire BlackBriar Advisors to oversee and stabilize the company's financial operations through Chapter 11 proceedings.

Thursday afternoon's filing also states the CRO would "investigate the potential for any wrongdoing by the Debtors' [Reagor-Dykes] former CFO and Ownership, to stabilize the Debtors accounting functions, to immediately put into place strong accounting controls, and to provide CFO support upon the departure of the Debtors' former CFO."

The company requests a hearing in a week, Thursday, Aug. 16.


earlier post Thursday morning - Reagor-Dykes Auto Group has made a request in U.S. Bankruptcy Court to hire BlackBriar Advisors as chief restructuring officer as the company restructures debt in its Chapter 11 filing.

This latest filing notes Reagor-Dykes received a commendation on its performance in Ford's June audit. Then, an audit in the last week of July found irregularities that prompted Ford to stop funding floor plan credit lines. Ford also stopped indirect lending to Reagor-Dykes and its customers. According to the filing, "this froze the Debtors operations, dried up their cash, and forced them to seek protection of this Court to keep the doors open and operating".

This latest filing points to the former Reagor-Dykes CFO. The Reagor-Dykes website lists Shane Smith as CFO. The attached photo is from this web page. 

This is an excerpt of the latest filing:

"Having been taken completely by surprise by the alleged findings of Ford in its last audit, the sweeping of all the Debtors' cash that Ford could sweep and control, the findings to date as to the concerning activities of the former CFO and perhaps others working in concert within the Debtors' operations, the Debtors and Ownership have been working non-stop to determine (this is a non-exclusive list): (i) the size of the cash hole created by the Ford sweeping of Debtors' cash, (ii) the true-up as best possible of what Ford has done with the funds swept; (iii) the nature of the actions and conduct of the former CFO and perhaps others working in concert that have caused losses to the Debtors (just what did they do?); (iv) how best to reverse the financial improprieties once determined (both to avoid any further losses and so that the Debtors' can produce viable and trustworthy financial data)"

According to Smith's bio, he has over 16 years of experience in the retail, manufacturer, and financing aspects of the automotive industry, previously serving as Asset and Operations Manager for Ford Motor Credit Company. Mr. Smith is responsible for the financial reporting, administrative and accounting functions, human resources, insurance, and capital relationships for the group.

The filing continues, "Ownership understands and embraces the prospect of BlackBriar conducting as part of its duties the inquiry into the extent to which there has been financial wrongdoing on the part of the former CFO and any other persons within the Debtors' organization. INCLUDING WITHOUT LIMITATION OWNERSHIP AND PERSONS RELATED TO OWNERSHIP. IN EFFECT, OWNERSHIP HAS DETERMINED IT NECESSARY THAT BLACKBRIAR INVESTIGATE OWNERSHIP, in the name of transparency and as necessary to make certain the Debtors' fulfill their obligations within chapter 11 process. (Capitalized words in lawsuit, not created for effect)

Court documents show Ford Motor Credit holds loans not just for new Fords, but several of the brands Reagor-Dykes sells. Specifics are in the pdf further below. This is a look at the current credit line limit and outstanding balance Ford claims:

Current credit line limit / outstanding balance

Reagor-Dykes Motors, LP
New Ford Line - $15,600,000.00 / $18,566,042.40
Used Line - $11,000,000.00 / $2,841,869.52

Reagor-Dykes Imports, LP
Mitsubishi New - $1,600,000.00 / $2,599,985.66
Multi MFGS Used - $10,600,000.00 / $3,399,728.50

Reagor-Dykes Amarillo, LP
Mitsubishi New - $1,300,000.00 / $3,354,420.56
Multi MFGS Used - $5,800,000.00 / $2,581,743.81

Reagor-Dykes Auto Company, LP
Ford New - $6,100,000.00 / $6,876,536.85
Lincoln New - $550,000.00 / $308,237.30
Multi MFGS Used - $7,000,000.00 / $1,873,577.50

Reagor-Dykes Plainview, LP
Toyota New - $6,100,000.00 / $8,620,070.46
Multi MFGS Used - $4,700,000.00 / $2,145,682.50

Reagor-Dykes Floydada, LP
Chevrolet New - $7,050,000.00 / $6,912,431.67
Multi MFGS Used - $2,000,000.00 / $587,127.50

Below is the filing made late Wednesday night:

Below is the filing Thursday afternoon requesting an emergency hearing:

This is Universal Underwriters Corporation’s objection filed Thursday afternoon:

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