LUBBOCK, Texas — The Reagor Dykes companies electronically filed an amended reorganization plan in bankruptcy court on Saturday afternoon.
Reagor Dykes filed for bankruptcy on August 1 amid allegations from Ford Motor Credit Company of fraud and default. Local banks accused Reagor Dykes of fraud in the form of check kiting.
Previous reorganizations proposals fell apart, and the bankruptcy case is still pending.
A summary of the plan makes it very clear that if reorganization plans fail then the next option is to liquidate what’s left of Reagor Dykes.
“Reagor-Dykes historically operated eight (8) new and pre-owned car Dealerships comprised of thirteen (13) Locations – twelve (12) in West Texas and one (1) location in Dallas – as a consolidated group,” the newest court documents said.
The proposal said, “The Dealerships or Locations will be operated on the same real estate where the Dealerships or Locations were operated prior to and during the bankruptcy case.”
“The Dealerships will be recapitalized by the Plan Sponsor or its designee,” the proposal said.
Who is the plan sponsor? That information is still not fully disclosed but, “The Fin Ewing Group will provide consulting services …” and “anticipated members” are Ron Blaylock and Rick Dykes.
Blaylock is a consultant and has a history with the Dallas-area-based Ewing Auto Group. Rick Dykes is co-owner of Reagor Dykes.
The plan sponsors will own 90 percent of the reorganized company and 10 percent of the reorganized company will be owned by a creditors trust.
“Reorganized Debtors will … receive the up to $14 million in cash and financing from the Plan Sponsor to be used for working capital and to pay Allowed Claims,” the proposal said.
The new equity will be $12 million in cash from the sponsor plus “plan sponsor advances.”
Ford will get $2 million cash plus a $5 million promissory note for its unsecured debt. GM will get $1.5 million in cash for its unsecured debt in Reagor Dykes.
Officers and directors of the newly reorganized company have not been named yet nor has a name been chosen for the reorganized company.
Administrative expenses – in other words, the cost of lawyers and other professionals – of $5 million will also be paid, under the proposed plan.
CLICK HERE to read a copy of the plan
CLICK HERE to read the plan’s disclosure statement.
As for the allegations of fraud, so far, only one person, former CFO Shane Smith, has been charged with a crime.
Related Story: Shane Smith charged with fraud by federal prosecutors in Amarillo
