Reagor Dykes (RD) filed a motion Tuesday in bankruptcy court to force banks and other financial institutions to pay off taxes, titles and licenses on vehicles that were purchased in the weeks before RD filed for bankruptcy.
In mid-September, the Texas Department of Motor Vehicles intervened in the RD bankruptcy case. The DMV said roughly 100 consumer complaints had been filed because titles were withheld from “innocent customers.”
RD’s motion said normally TTL (tax, title and license) and any outstanding lien on a trade-in vehicle is paid off in a way that is seamless to the customer. But things have not been ordinary since August 1 when RD filed for bankruptcy.
In some cases, trade-off liens have not been paid. In other cases, TTL is not paid.
The RD motion said customers are getting threats of repossession, sometimes from the lender on their new car, sometimes from the lender of their old car, or sometimes both.
“Affected customers are now unable to register their cars,” the RD motion said.
Previous court records have said RD bounced checks to local banks for millions upon millions of dollars. Those banks and other lenders then withheld titles.
The motion said it was RD’s responsibility to pay prior to the bankruptcy case. Now, it falls to the lenders, according to the newest court documents.
“Affected customers are not responsible for the TT&L fees and the trade lien payoff payments,” the motion said. “Yet, it is these very consumers that are currently and prospectively impacted.”
The motion asks that a bankruptcy judge force the retail lenders to pay off the TTL and trade-in liens.
A hearing has been requested for October 18 on the issue.
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