Ford Credit supports part of Reagor-Dykes' request for lenders to pay TT&L, trade-ins
As we reported earlier this week, attorneys for Reagor-Dykes have asked the bankruptcy court to make its direct retail lenders pay for customers' tax, title and license fees and also to pay off trade-in balances.
The filing states in late July Ford Credit placed personnel at each Reagor-Dykes dealership, took possession of vehicle keys, titles and notified indirect lenders to send money from unpaid sales contracts to Ford Credit instead of Reagor-Dykes. The filing states, as a result, commercial banks placed holds on the Auto Group's funds and retail lenders stopped funding completed retail sales contracts.
Because of this, Reagor-Dykes has not been able to pay for TT&L or trade-ins. The filing states the Auto Group has learned some customers have not been able to register their cars and are facing threat of repossession and/or demand for payment on either the new vehicle or the one the customer traded in.
Reagor-Dykes' attorneys argue, while the dealerships were responsible for these payments before it filed for chapter 11, the retail lenders now hold the affected contracts. Therefore, the retail lenders should now pay all unpaid TT&L and trade-in payoff amounts, under the "holder rule" in bankruptcy law.
A hearing on this issue is scheduled for next week.
Ford Motor Credit filed notice Friday it supports a portion of this argument. It has already paid off these amounts for contracts it was assigned by Reagor-Dykes, according to this new filing. And Ford Credit has stopped collection efforts to customers who traded in vehicles where Ford Credit does not hold the contract of the new car purchased.
Ford Credit has issue with where money is sitting from purchases before Aug. 1, when the Auto Group filed for bankruptcy. In the filing, these funds "represent sales proceeds which are a part of Ford Credit's cash collateral. As such, Ford Credit requests that the Court additionally require that the Retail Purchasers immediately remit these funds to the Debtors via Debtors' DIP accounts".
Ford Credit writes it understands that after Reagor-Dykes filed for bankruptcy, some money was wired into "pre-petition" accounts held with Vista Bank, IBC, FirstCapital Bank and AIM Bank and "that these pre-petition accounts remain open. Ford Credit wants to prevent any further funds being diverted from the estate and flowing into Debtors' pre-petition accounts."
In bankruptcy proceedings, the court oversees all actions to maximize the value of the estate, in turn, maximizing value to creditors.
Ford Credit asks that if the court approves the request for retail lenders to pay TT&L and trade-in balances, these retail lenders may file an unsecured claim against the appropriate estate.
Also, Ford Credit asks the court require these lenders or "retail purchasers" to immediately pay into Reagor-Dykes' debtor-in-possession accounts all money that is being held for vehicles purchased before Aug. 1.
OCT. 12: FirstCapital files counterclaim, motion to dismiss
OCT. 10: Reagor-Dykes aircraft to be sold, pending court approval
OCT. 10: Several filings in Reagor-Dykes bankruptcy case
OCT. 1: KamKad, Reagor-Dykes execute purchase agreement
SEPT. 24: FirstCapital Bank requests First Bank & Trust lawsuit against it, Reagor-Dykes, others move to federal court
SEPT. 21: Judge sets schedule, trial date in Vista Bank v FirstCapital Bank lawsuit
SEPT. 21: Former Reagor-Dykes CFO denies late payments, says Vista Bank attacked him, his family
SEPT. 20: Vista Bank sues former Reagor-Dykes CFO, claims loan default
SEPT. 19: Texas DMV: Reagor-Dykes should promptly resolve title issues
SEPT. 19: Brad, Kenneth Burgess file motion to dismiss Vista Bank lawsuit
SEPT. 18: First Capital Bank files motion to dismiss lawsuit
SEPT. 18: Court approves bid process for Reagor-Dykes Auto Group, extends use of cash collateral
SEPT. 17: 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