Judge approves sale of Reagor-Dykes plane; Wells Fargo objects to portion of TT&L motion
U.S. Bankruptcy Judge Robert Jones has approved a motion allowing sale of a Reagor-Dykes aircraft.
Attorneys for Reagor-Dykes and Madison Funding LLC filed the motion, stating both sides agreed to terms. This involves a related company that has not filed for bankruptcy, Reagor-Dykes Executive Travel, LLC.
The plane is a 1995 Cessna Citation ULTRA Model 560. RDET acquired a loan from Madison Funding for $917,500 in December 2016.
An earlier filing stated Reagor-Dykes Executive Travel has defaulted on the loan and agreed to sell. A prospective buyer has emerged. FlightAware.com shows the most recent flight for this aircraft was Aug. 7 from Addison in North Texas, near Reagor-Dykes' dealership in that part of the state, to Lubbock.
Employment of Mullin Hoard & Brown
Also filed in court records, the judge's order from a hearing earlier this month in which the law office of Mullin Hoard & Brown sought payment for representing Reagor-Dykes from Aug. 1 to Aug. 21.
Judge Jones approved employment of MH&B.
Bart Reagor and Rick Dykes in early August each paid a $250,000 retainer to the law firm. This court action was required for MH&B to receive payment. The law firm is authorized to file a final application for payment of fees and expenses.
Wells Fargo objection
As we reported last week, attorneys for Reagor-Dykes have asked the bankruptcy court to make its direct retail lenders pay customers' outstanding tax, title and license fees as well as pay off trade-in balances.
Reagor-Dykes argues once it filed for bankruptcy its access to funds and lines of credit were cut off. This left some customers with unpaid TT&L or trade-ins. In some instances, customers are being asked for loan payment on both their new vehicle and the one they traded in.
Ford Credit filed notice of its support of part of this motion, to help resolve customers' issues. And Ford Credit states it has paid off TT&L or trade-ins for contracts it was assigned. Ford Credit's filing questioned where money is for purchases made prior to the Aug. 1 bankruptcy filing. Ford Credit argues this is part of its collateral.
Wells Fargo's new filing states a number of its borrowers reported to Wells Fargo that Reagor-Dykes did not pay off trade-in liens. This has kept Wells Fargo borrowers on the hook for these loans, even though the vehicles were traded in to Reagor-Dykes. The filing states neither the borrower nor Wells Fargo knows where these vehicles are now.
Wells Fargo objects to the request that all lenders provide a list of collateral affected by unpaid trade-in liens, since Wells Fargo already provided a list. Wells Fargo, in turn, asked for whereabouts on vehicles that it believes are its collateral. The bank asks this order be limited to to lenders providing title information within a "reasonable time" of learning the vehicle was taken in by Reagor-Dykes without payment.
And as far as what loans or vehicles are affected, Wells Fargo states it has no assistance from the Auto Group, relying solely on customer reports. According to the filing, "Debtors [Reagor-Dykes] further have failed to identify all the Affected Consumers with outstanding Wells Fargo payoffs. Although Debtors have information regarding unsatisfied liens against vehicles they took in trade, lenders such as Wells Fargo can only determine if one of their borrowers is involved with a transaction 'related to the Debtors or sold by the Debtors' if that borrower informs the trade-in lender of that fact."
Wells Fargo also objects to Reagor-Dykes' request that the court order all lenders that are owed trade-in amounts to remove negative comments or marks on consumers' credit reports. Wells Fargo writes a borrower may have his or her own credit issues, separate from Reagor'Dykes' "pre-petition malfeasance". Further, Wells Fargo states this request is beyond the bankruptcy court's jurisdiction.
Order granting sale of aircraft:
Wells Fargo objection: