LUBBOCK, TX (KCBD) - Eighteen days ago, the Reagor-Dykes Auto Group attorneys asked the judge to grant a motion to compel retail lenders to pay outstanding tax, title and license fees and trade-in payoffs. Eleven days ago, the motion was pushed until today because a majority of the lenders were not yet on board. Although there was no resolution in today’s hearing, more facts have been revealed about what is involved with this aspect of the bankruptcy case.
So far, more than 1,200 vehicle transactions are at issue in this part of the bankruptcy hearing. Of those, about 300 of them have been resolved.
One issue from retail lenders is this motion could compel them to pay the tax, title and license, interest and penalties of up to $250 for each transaction involved. The bankruptcy judge could order the agencies to waive the interest and penalties. In some instances, the customer may have already paid the TT&L to the dealership, but the funds did not make it to the retail lenders or the state.
One retail lender attorney at the hearing today said, “We don’t know where the cars are." Another attorney says they do not know where the titles are. They were all wanting a master list to to identify all vehicles involved. On the eve of bankruptcy, floor plan lenders took possession of many certificates of title and no one knows where they are, according to attorneys in the courtroom.
The bankruptcy judge encouraged all parties to come to an agreement on their issues in order to avoid dragging the matter out.
According to an attorney for Reagor-Dykes Auto Group, by Friday they may be able to come to an agreement with two or three retail lenders, which represent about 25 percent of the TT&L issues.
Another hearing has been set for November 14, 2018 at 1:30 p.m., but it will likely be a status report.
The motion filed by Reagor-Dykes Auto Group says when Ford Motor Credit sued them in late July 2018, they requested the sequestration of Reagor-Dykes' assets. As a result, commercial banks placed administrative holds on Reagor-Dykes Auto Group funds and retail lenders refused to fund on completed retail sales contracts. The motion says because of this, Reagor-Dykes Auto Group has not been able to pay for taxes, title, and license fees on completed sales transactions, or to pay for liens on vehicles traded in on the purchase of a new vehicle.
A ruling to approve the motion would mean if there are any negative comments on an affected customer’s credit report, those comments will be removed. If the customer was having to make monthly payments for their trade in and their new vehicle, the payoff for their old vehicle will finally be paid. If the customer was not able to get their vehicle registered because the tax, title and license fees had not been paid, they will be able to do so after the retail lender pays the fees.
Reagor-Dykes Auto Group’s motion asks the funds received from the retail lenders, under court supervision, be deposited into a separate debtor-in-possession bank account. These funds will only pay all outstanding taxes, title and license fees and trade-in liens. The motion also asked for any negative comments on the affected consumer’s credit report to be removed. Reagor-Dykes' motion says the affected consumers are not responsible for the TT&L fees and the trade-in payoffs, but they are the ones being impacted by the situation.