LUBBOCK, Texas — Vista Bank on Friday filed a motion to convert the Reagor Dykes bankruptcy case from Chapter 11 to Chapter 7. If approved, the move would pull the plug on Reagor Dykes and liquidate what’s left of the company. FirstCapital filed a similar motion on Wednesday.
In December, the office of United States Trustee, a division of the United States Department of Justice, filed a motion to covert the case to Chapter 7 (liquidation).
The trustee asked a bankruptcy judge to set a deadline of January 7 to get a realistic reorganization plan in place. As of February 1, the case continues with no Chapter 11 reorganization plan in place.
Vista pointed out, as did FirstCapital, no viable plan has been approved and a potential plan sponsor backed out. As of January 22, according to court records, there is no plan sponsor who can provide the capital needed to make a reorganization effort.
A February 12 hearing in bankruptcy court was scheduled on the question of converting to Chapter 7.
Reagor Dykes filed for bankruptcy on August 1, 2018 amid allegations of fraud and default. Twelve former employees, including former CFO Shane Smith, pleaded guilty in federal court. They will be sentenced at a later date.
