When Reagor Dykes filed for bankruptcy more than two months ago, nearly 900 customers who bought cars from the dealerships were caught in the middle of a massive lawsuit.
Now, months later, they still don’t have their titles or license and haven’t been able to register their cars since then.
Reagor Dykes was a household name if you lived in West Texas. If you turned on the TV, or drove down any street in Lubbock, it’s likely you saw the name Reagor Dykes. But, it didn’t always start as the large corporation most people knew it as.
It started out as a small business, first started by Bart Reagor in 2003. Three years later, Rick Dykes partnered with Reagor.
Both men were pillars in the Lubbock community. They not only led efforts to redevelop downtown but also donated hundred of thousands to charities and local athletics.
In just over 15 years, they built a car dealership empire, but it all came crashing down on Aug. 1.
On that day, news broke that Reagor Dykes filed for Chapter 11 bankruptcy. That decision came after Ford Motor Credit Company filed a lawsuit against Reagor Dykes, saying the mega car dealership defaulted on roughly $40 million. That’s just a part of the more than $116 million owed.
Ford Motor Credit also accused Reagor Dykes of fraud.
“We have never had a case with so many financial institution victimized,” said bankruptcy lawyer Fernando Bustos. “This is probably the biggest fraud case Lubbock has seen.”
But it’s not just the mega corporations: Hundreds of customers are trapped in the crossfire.
“They don’t care about the customers,” said Susie Edwards, a recent customer. “We should’ve been the first ones taken care of, as far as I’m concerned, in the bankruptcy.”
Many customers are without titles for cars they bought in the days or weeks before the Chapter 11 bankruptcy.
“I’m totally just out here on a limb,” Edwards said. “I’m making the payments, but I don’t know if I’m going to get to keep it. I still don’t have permanent tags on it.”
Edwards is on her second temporary tag. She’s nervous the car could be taken from her driveway at any moment.
“I was devastated. Everybody kept telling me that I was going to lose my car,” said Edwards.
Ordinarily, the process would look like this: A customer would go to Reagor Dykes with their old car to trade in for a new one. When that deal is signed, it would then be the dealership’s job to pay off the tax, titles and license on the new car, plus any remaining lien on the old car.
However, those payments were stopped because of insufficient funds after Reagor Dykes filed for bankruptcy, stalling the process altogether.
After taking money from the customers or from the bank, Reagor Dykes bounced checks for millions of dollars, which included the checks for TTLs, also known as tax, titles or license.
“No one is helping, no one has answers. Everyone is confused as to what’s going on, and no one has guidance on what to do next,” said Valerie Watson, who is frustrated with the whole process.
Watson is making two car payments after she traded in one car for the other, but none of the titles got transferred correctly. The total payment cost more than $1,600 a month.
“I had a huge knot in my throat. What’s going to happen next?” she said.
Watson is a single mom struggling with what she calls a crippling, unexpected bill.
“How am I going to afford two car payments and insurance on both of these vehicles? I was sickened to my stomach,” Watson said.
Watson and Edwards are just two of the 900 customers affected by TTLs and trade-in liens.
Reagor Dykes, no longer under the control of Mr. Reagor or Mr. Dykes, asked a judge to force retail lenders to pay off those TTLs plus the lien.
Several lenders, including U.S. Bank, objected.
U.S. Bank said in court documents that it already gave the money for TTLs and trade-ins when it originally loaned the money, and it shouldn’t have to pay twice. Other banks said similar statements.
U.S. Bank accused Reagor Dykes of abusing the bankruptcy system to avoid responsibility on the estimated $6.5 million in TTLs and liens.
“It’s a huge burden,” Watson said. “It’s something I have to carry and something I have carried for the last 90 days.”
For Edwards, she says the stress affects every part of her life.
“I can’t even sleep at night for worrying about it,” she said.
For some customers, it’s even becoming a health concern.
“I have stage IV lung cancer. I’ve been fighting it this time since August of 2016. It’s keeping it stable right now, but the one thing I don’t need is stress in my life,” Edwards said.
The big question is when and how the TTLs will be paid. Customer are left waiting for the answers.
“I keep watching all the news, thinking maybe they’ll let us know. Maybe the judge will say, ‘OK, take care of your customers, and then we’ll do everything else we need to do,’ but that hasn’t happened,” Edwards said.
A court date is set for Oct. 29. We’re told involved lawyers hope to have a resolution by this time.
Bart Reagor and Rick Dykes were unable to make a comment due to pending litigation.
