Ford Credit claims Reagor-Dykes is not following court orders; court grants extension to file docs
Ford Motor Credit filed a court document Tuesday explaining why the U.S. Bankruptcy Court should not allow Reagor-Dykes to hire a chief restructuring officer. This comes a day after a Justice Department Trustee filed notice also opposing the hiring of a CRO.
Ford Credit and the U.S. Trustee request the court to appoint a chapter 11 trustee. Ford's request for a chapter 11 trustee last week stated it believes this could be one of the "largest floor-plan-financing frauds in the history of the United States".
Following Ford Motor Credit's lawsuit claiming Reagor-Dykes companies owe Ford Credit more than $116 million, several Reagor-Dykes companies filed for chapter 11 bankruptcy protection. Reagor-Dykes has requested the hiring the hiring of BlackBriar. A chief restructuring officer from BlackBriar would, among other things, investigate the company's financials and actions by members of the company's management and ownership, according to a Reagor-Dykes filing.
In this latest filing Ford Credit attorneys write that the request to hire a chief restructuring officer "is nothing more than an “end run” around Ford Credit’s pending motion to appoint a Chapter 11 trustee. Debtors past fraudulent activity and malfeasance disqualifies current management from continuing control and the Debtors should not be permitted to proceed in this case as Debtors-in-possession."
According to Ford Credit, Reagor-Dykes has not followed court orders issued Aug. 3 when the company's owners were in court requesting use of cash collateral to pay employees and keep dealerships open. Specifically, Ford Credit's claim states Reagor-Dykes companies:
"a. Have failed to return all demonstrator vehicles;
b. Have failed to register vehicles sold to consumers;
c. Have failed to pay off trade-in liens; and
d. Have failed to provide Ford Credit with keys and titles to all vehicle"
According to Ford Credit, since the petition for bankruptcy protection, "Debtors are not selling vehicles, are unable to match vehicle inventory to specific dealerships, are unable to match keys and titles to its vehicle inventory, and are unable to fulfill its obligations to customers such as registering vehicles after a sale. In addition to being incapable of fulfilling its obligations as Debtors-in-Possession, Debtors have not presented any information about the cost associated with employing a Chief Restructuring Officer or how Debtors intend to pay for a Chief Restructuring Officer."
The U.S. Bankruptcy Court Tuesday grant a request Reagor-Dykes filed Saturday for more time to submit financial documents. The request stated because of the sheer volume of paperwork covered, the time needed is extensive. The court has extended the deadline to submit documents to September 14.
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
The latest filing is below: