Ford Credit, GM object to certain aspects of proposed Reagor-Dykes sale
Ford Motor Credit and General Motors object to some specifics within a proposed sale of the Reagor-Dykes Auto Group.
Ford Credit's filing states the most effective way to maximize value for creditors in this bankruptcy is sale of substantially all of Reagor-Dykes assets, including assumption and assignment of its contracts, including sales and service agreements with manufactures and certain leases.
However, Ford Credit is concerned with approving a stalking horse bidder before the proposed bidder executes a binding asset purchase agreement. KamKad Automotive Group is the potential "stalking horse bidder", with a price of more than $25 million. The Reagor-Dykes Auto Group has Ford dealerships in Plainview and Lamesa.
Ford Credit's filing states it should be included among parties determining who is a qualified bidder. It currently is not. This is similar to Gulf States Toyota's filing last week that it should be involved in determining who takes control of the Reagor-Dykes Toyota dealership in Plainview. Gulf States Toyota's filing also noted the dealership agreement for that location expires before the proposed sale date of late November.
Also, Ford Credit argues it is not clear whether the sale includes franchise agreements with various vehicle manufactures, writing "these Franchise Agreements are the most essential/valuable executory contracts that are being assumed and assigned and the OEMs need to be placed on notice that this is part of the transaction."
Ford Credit's filing also notes, pending resolution of the specifics outlined above, it supports sale but believes it should happen sooner.
General Motors filed objection to the bid process specific to Reagor-Dykes Chevy in Floydada. GM states it must approve any operator of a dealership; Reagor-Dykes cannot transfer the right to operate a franchise through this proposed sale.
GM's filing states "GM has unfettered discretion in approving dealers, and that such a process is lengthy, complex, multi-faceted, and never undertaken lightly. That a potential purchaser of Debtors’ assets might operate other automotive dealers alone is insufficient."
General Motors also states the Reagor-Dykes Chevy dealership in Snyder is not among the Reagor-Dykes companies that filed for bankruptcy. But, if it were to file for chapter 11 protections, General Motors would have the same objection before the bankruptcy court.
As granted by the court last month, a chief restructuring officer is effectively running most of Reagor-Dykes operation. General Motors argues it has not authorized any third party; it states employment of a CRO is breach of its dealer agreement. General Motors writes this alone is enough to terminate the Floydada dealership.
According to this filing, "the value to GM of any dealership operations at Floydada has been irreparably harmed by the inability to operate, leading consumers to take their business elsewhere and harming GM’s interests."
The U.S. Bankruptcy Court has hearings scheduled Tuesday and Wednesday in this case.
You can read Ford Credit and General Motors' filings below:
SEPT. 14: Judge sets trial date in Ford Credit lawsuit vs. Reagor-Dykes
SEPT. 14: Reagor denies Ford Credit's claim vehicles sold out of trust
SEPT. 13: Dykes: Former Reagor-Dykes CFO admits he provided false info to Ford Credit
SEPT. 11: Reagor-Dykes Auto Group requests court to allow sale of company
SEPT. 4: Reagor-Dykes Auto Group establishes process to resolve customer problems
AUG. 31: International Bank of Commerce asks for court to allow it to foreclose on Reagor-Dykes dealerships
AUG. 31: More Reagor-Dykes companies, co-owners may soon file for chapter 11
AUG. 30: Court extends Reagor-Dykes employment of CRO; officer discusses potential dealership buyers
AUG. 29 : International Bank of Commerce asks for loan payment in Reagor-Dykes case
AUG. 29: Ford Credit objects to Reagor-Dykes earlier legal team
AUG. 27: Vista Bank doubles relief request in new federal suit against FirstCapital Bank
AUG. 25: Reagor-Dykes chief restructuring officer hires new legal team
AUG. 25: GM proceeding with termination of Reagor-Dykes Floydada
AUG. 23: Landlords demand rent for Reagor-Dykes dealerships in Lubbock, Plainview
AUG. 20: Ford Credit moves ahead with suit against Reagor, Dykes, some R-D companies
AUG. 18: Reagor-Dykes bankruptcy case: Read court order following Aug. 16 hearing
AUG. 17: Auto dealer claims Reagor-Dykes owes $513,000, vehicles may be in consumers' possession
AUG. 16: Vista Bank sues FirstCapital for $6 million, claims Dykes helped perpetrate check kiting scheme
AUG. 16: Bankruptcy court allows Reagor-Dykes continued use of cash collateral, hiring of CRO
AUG. 15: Reagor-Dykes Auto Group issues written apology
AUG. 14: Loss of Reagor-Dykes Chevrolet in Floydada a potential financial pitfall for city
AUG. 14: Vehicle auction company claims Reagor-Dykes owes it $687,000
AUG. 14: Ford Credit claims Reagor-Dykes is not following court orders; court grants extension to file docs
AUG. 13: U.S. Trustee opposes Reagor-Dykes request to hire chief restructuring officer
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