First Capital Bank files motion to dismiss lawsuit
First Capital Bank filed a motion to dismiss a lawsuit by Vista Bank, claiming both banks are victims of a check kiting scheme by Reagor-Dykes.
The filing indicates hundreds of creditors, including both banks, will be left "holding the bag" for unpaid Reagor-Dykes checks and bills.
Vista's lawsuit claims First Capital knowingly facilitated a multi-million-dollar scheme, initiated by Reagor-Dykes, to allow First Capital to keep collecting fraudulent deposits, while pushing fraud losses onto Vista through a system of mass check returns.
The motion to dismiss claims First Capital met its obligations to dishonor more than $6 million in Reagor-Dykes checks and Vista received timely notice. Citing the uniform commercial code and federal regulations, First Capital claims it satisfied its legal duty.
First Capital claims Vista Bank has not, will not and can not cite any law that suggests First Capital could not protect its own interest once it learned for Ford's impending lawsuit, Reagor-Dykes severe financial problems, and planned bankruptcy.
It goes on to explain how both banks are victims, using musical chairs, "for those checks totaling more than $2.7 million for which First Capital missed the midnight deadline, it will be left without a chair. For those checks for which First Capital met the midnight deadline totaling more than $6.2 million, Vista Bank will be left without a chair. This case is that simple."
First Capital indicates Vista Bank's lawsuit should be dismissed, for failure to state a claim under law.
This appendix First Capital filed has a detailed explanation and history of check kiting:
TUE: Court approves bid process for Reagor-Dykes Auto Group, extends use of cash collateral
MON: Ford Credit, GM object to certain aspects of proposed Reagor-Dykes sale
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