Vehicle auction company claims Reagor-Dykes owes it $687,000
Vehicle auction companies Manheim Remarketing, Inc. and Online Vehicle Exchange, L.L.C. requested a U.S. Bankruptcy Court allow it to proceed to reclaim $687,345 plus interest and other fees.
Manheim claims in July it entered agreements to sell Reagor-Dykes 16 vehicles. The filing states "Despite repeated requests from Manheim and from Manheim's counsel, Debtors [Reagor-Dykes] and their counsel have refused to provide Manheim any information regarding the whereabouts, status, and/or condition of its collateral."
The filing states these vehicles, the collateral, continue to depreciate. It's common for autos to depreciate at a rate of at least 2% per month, according to Manheim's claim.
This court filing states it is not known whether Reagor-Dykes has sold any of these vehicles. "However, it has been alleged by other creditors in these cases that [Reagor-Dykes companies] have a standard practice of selling vehicles out of trust and deceiving their creditors as to the status of their collateral."
Manheim's attorney writes further, these dealerships "are unlikely to be able to generate enough income to operate in bankruptcy where they have no post-petition financing and no real prospects for such financing."
Manheim has requested that a motion on this request be heard during a hearing scheduled Thursday morning on Reagor-Dykes' request to continue using cash collateral. Manheim asks the usual waiting period for a motion like this to be shortened because of the "highly mobile nature of Manheim's collateral, and the fact that the Debtors have sold some vehicles out of trust and refuse to account to Manheim for its collateral".
We reported Monday 341 creditors meetings that were scheduled for Sept. 6 have been rescheduled by the U.S. Trustee's Office to Sept. 27.
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
Below is Manheim's filing: