LUBBOCK, TX (KCBD) - In a 60 page document filed Monday afternoon, Reagor-Dykes Auto Group submitted a plan of reorganization to the bankruptcy court.
The plan outlines the general structure of the plan, treatment of classified claims and interest, means for implementation of the plan, and much more.
The plan says, “the McDougal-Dykes-Ewing Group will recapitalize the business with up to $20 million. That $20 million will be used to (a) revitalize/repair a business that was harmed by actions taken in early August 2018; (b) help pay unpaid taxes, title, and license fees and trade-in loans; (c) help make other payments to creditors on claims approved by this Court, including Ford Credit; and (d) provide sufficient working capital for Reagor-Dykes to exit from bankruptcy.”
This plan comes the day before a bankruptcy hearing to discuss, among other things, Ford Motor Credit’s claims that “there was no prospect for a reorganization” for Reagor-Dykes Auto Group.
Earlier Monday, RDAG filed an objection to Ford’s claims saying “Reagor-Dykes is not dead. Reagor-Dykes is not out of money. Reagor-Dykes is not without a plan to restructure its debts and recapitalize its business.”
The objection states Reagor-Dykes has secured a commitment from International Bank of Commerce (subject to certain terms and conditions) to lend up to $4.75 million to get Reagor-Dykes out of bankruptcy. "This financing is the first step in a multi-step process to bring back a once-proud and productive business to West Texas. This financing will help stabilize operations and inject confidence into this Chapter 11 process and the future of Reagor-Dykes. "
In the objection filed earlier Monday, Reagor-Dykes says it has refrained from going on the offensive by not seeking Ford Credit documents, Ford Credit communications, communications between Shane Smith’s long-time friend, Gary Byrd, who is the Ford Credit employee who managed Reagor-Dykes' account with Ford Credit, and Ford Credit’s audit results. The objection also states Reagor-Dykes has not sought Byrd’s private communications with Shane Smith; nor have they tried to understand why Byrd’s son worked for Reagor-Dykes without the ownership group’s knowledge.
“But the path forward has now changed. Because of Ford Credit’s attempt to obliterate Reagor-Dykes – perhaps in hopes that such an outcome will eliminate information relevant to the concerns noted above – Reagor-Dykes has no choice but to change course, and the Plan proposed by Reagor-Dykes will reflect this change. Importantly, this changed path – at Ford Credit’s insistence – should have no impact on Reagor-Dykes’ ability to confirm a Chapter 11 plan of reorganization. Like the rights of all parties, Ford Credit’s rights will be protected, but Ford Credit will be placed into the position of a disputed claimant until its rights and Reagor-Dykes’ claims are reconciled.”
"The Plan proposed by Reagor-Dykes is confirmable, and the notion of a third-party non-consensual release is not a factor. Ford Credit will get what it wants, which is a litigated result. Ford Credit’s creation of this litigated result, which will likely be the product of expensive, high-stakes, and public litigation, should not interfere with the combined goals of Reagor-Dykes, International Bank of Commerce, and the McDougal-Dykes-Ewing Group to bring this business back to a place where it is productive and meaningful to the place and people of West Texas.
"For these reasons, this Court should deny Ford Credit’s attempt to leave this case as a burned-out engine of a charred truck. Ford Credit’s claims against the Debtors are disputed, pending further investigation of the alleged fraud and Ford Credit’s involvement therein. They should not be the basis to grant relief requested by Ford Credit. The property in which Ford Credit asserts a lien is necessary for an effective reorganization, and the Plan proposed by Reagor-Dykes properly treats and adequately protects all of Ford Credit’s alleged claims and liens against Reagor-Dykes and the collateral that secures such claims should this Court ultimately allow them. "