GM proceeding with termination of Reagor-Dykes Floydada
General Motors is asking the federal bankruptcy court to lift an automatic stay and allow it to terminate its dealer agreement with Reagor-Dykes Floydada.
GM claims Reagor-Dykes has violated its dealer agreement by not maintaining minimum working capital, breaching its promise to have a separate line of credit, not having a uniform accounting system and filing for bankruptcy.
GM also claims hiring a chief restructuring officer constitutes an unauthorized change in management, also a violation.
GM sent notice on Aug. 10 of its intention to close the dealership, effective Oct. 15. Reagor-Dykes has 60 days to protest Friday's motion.
In its request for relief, GM claims Floydada's dealership cannot recover, given its major problems on the balance sheet. GM does not believe its customer loyalty and reputation should be further jeopardized by a "futile chapter 11 reorganization attempt".
GM indicates it plans an audit of transactions affecting it at a future date, to be discussed with the Reagor-Dykes CRO and attorneys.