LUBBOCK, Texas — The Reagor Dykes bankruptcy plan faces even more obstacles after GM Financial filed a motion to have the plan tossed out of bankruptcy court, and the Plainview location landlord wants her property back.
In early September Reagor Dykes filed a second Chapter 11 reorganization plan. The first one fell apart in late 2018. The second plan calls for a plan sponsor to put up $13 million in exchange for 90 percent equity in the dealerships.
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The plan is up for a vote of businesses and people who are owed money.
“[Reagor Dykes] advanced a series of failed resolutions – this Plan is no different,” GM Financial wrote.
“The Debtors have put the cart before the horse, again, by soliciting votes in favor of a Chapter 11 reorganization without a definitive Plan Sponsor, without a firm understanding of who and how the proposed Restructuring will work, without any franchise agreements and without a commitment from a manufacturer to support post-confirmation operations,” GM Financial wrote.
“Reorganization at this point appears futile…”
court document filed on behalf of patti sue noel
GM Financial said the plan lumps all unsecured creditors together as one with no regard to the legal priority of each claim.
“There is no attempt to provide any rationale or justification for this result,” GM Financial said.
GM Financial also objected to the idea that Rick Dykes could put up $1 million and then be free of roughly $100 million he personally guaranteed.
GM Financial described a portion of the reorganization plan as “a slight-of-hand transaction, which seeks to provide ammunition to parties associated with one of the largest automotive floorplan frauds in history to be used against unsuspecting creditors.”
GM Financial argued that Reagor Dykes and the people associated with Reagor Dykes are not entitled to walk away debt-free after they engaged in multiple forms of fraud.
So far, eight Reagor Dykes employees pleaded guilty to federal crimes.
“[Reagor Dykes] advanced a series of failed resolutions – this Plan is no different.”
court document filed by GM Financial
Also last week, Patti Sue Noel – acting on behalf of the Jack Morris estate – asked the bankruptcy judge to let her take back the Reagor Dykes Ford Lincoln location in Plainview.
“[No] rent has ever been paid for the months of August 2018 or September 2018. No rent has been paid for October 2019, November 2019, or December 2019,” Noel’s attorney wrote last week.
A check was provided for October 2019, but Reagor Dykes asked that it not be deposited.
Noel’s motion said Ford used the location to store 100 or more vehicles rent-free. Then Ford’s repossession agent “effectively ransacked the Plainview Dealership … leaving the Plainview Dealership in complete disarray.”
Pictures were filed in March 2019 in bankruptcy court to back Noel’s claims that the property was not cared for. This most recent motion said utility services had been allowed intermittently to lapse.
Related Story: Reagor Dykes Ford dealership in Plainview, images from court records
Noel’s motion said Reagor Dykes has “no ongoing operations, no cash, … no employees,” and little or no need for the property in Plainview.
“Additionally, the Plainview Dealership is not adequately secured. At least one break-in or attempted burglary has occurred,” Noel’s motion said.
“Reorganization at this point appears futile, and the plan is otherwise not confirmable.” Noel’s motion said.
Noel wants permission to file an eviction notice against Reagor Dykes which she is not allowed to do while the bankruptcy court provides Reagor Dykes with special legal protection.