Ford suit against Reagor-Dykes on hold while bankruptcy case proceeds
Senior U.S. District Judge Sam Cummings Monday granted a request on behalf of Reagor-Dykes Auto Group companies requesting a stay in Ford Motor Company's $116 million lawsuit against the companies.
The order filed Monday essentially means Ford's lawsuit is on hold while Reagor-Dykes' case in U.S. Bankruptcy Court proceeds.
Ford Motor Credit filed suit Wednesday, claiming Reagor-Dykes has been selling vehicles out of trust, with an estimated $116 million owed to Ford, and more than $40 million due now. Several sources told FOX34 Thursday the company could not make payroll due a day earlier. A U.S. District Judge Friday allowed Reagor-Dykes to pay its employees, using money Bart Reagor and Rick Dykes transferred into an account.
During Friday's 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. Reagor-Dykes issued a statement that its dealerships are open for business beginning Monday.
A hearing is scheduled for Aug. 16 in the bankruptcy case.