LUBBOCK, Texas — A bankruptcy judge on Thursday refused to give Reagor Dykes a fourth extension on the so-called “exclusivity period” which expired on October 2. On October 1, Reagor Dykes requested the extension until January 31, 2020.
In simple terms, an exclusivity period is when only Reagor Dykes can file a bankruptcy plan.
“The cases have been pending for over a year, and insufficient cause exists to further extend exclusivity,” the judge wrote in his order on Thursday.
Creditors can now file their own plan to rival the one filed by Reagor Dykes. The first such plan in November 2018 fell apart.
Reagor Dykes filed for Chapter 11, which is reorganizational bankruptcy, on August 1, 2018. The company was accused of fraud, and five employees pleaded guilty this year to federal charges.
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Not only can creditors file their own plan, but in the meantime, one of the creditors, First Bank and Trust, requested that the case be changed from Chapter 11 to Chapter 7 bankruptcy.
What is Chapter 7? According to uscourts.gov, “This chapter of the Bankruptcy Code provides for ‘liquidation’ – the sale of a debtor’s nonexempt property and the distribution of the proceeds to creditors.”
There is an October 25 hearing at 10:00 on the request for Chapter 7.
FB&T said in the request, “The most recent consolidated statement of insolvency by the Debtors, … indicates assets of about $68,000 and liabilities exceeding $100,000,000.”
If the case survives as Chapter 11, there is a December 11 hearing for the Reagor Dykes reorganization plan. The plan calls for Auto Investment Group and SLJ Company to recapitalize the various Reagor Dykes Dealerships with $13 million in exchange for 90 percent equity.
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