LUBBOCK, TX (KCBD) - Attorneys for Bart Reagor and Rick Dykes are asking a district court to grant more time to find evidence disproving Ford Motor Credit’s claim that both Reagor and Dykes had a direct hand in committing an act of fraud.
Ford filed a series of court documents on Monday alleging the Reagor-Dykes entity committed an act of fraud, which ultimately resulted in the company filing for bankruptcy in August. Because the bankruptcy lawsuit is directed at RDAG, Ford stated in court documents, both Reagor and Dykes are free to liquidate assets that could have otherwise been used to pay back Ford.
Essentially, Ford’s complaint against the two said the more time they have as bankruptcy proceedings carry on, means they have time to hide assets that could go towards Ford.
Attorneys for Reagor and Dykes said this is not the case and the reason RDAG is not able to make its way through bankruptcy proceedings is because all energy and time is devoted to not negatively effecting the outcome of the results in this case.
Both attorneys said there is a need for an opportunity for defense, which means they would be able to compile evidence that would contradict Ford’s claims.
“Reagor and Dykes contend that Ford Credit may have violated these duties, causing the Reagor-Dykes dealerships to fail and voiding the guaranty agreements,” court documents filed on Wednesday stated.
The RDAG attorneys also said Shane Smith, the former chief financial officer for RDAG, had a long-time professional and social relationship with the company’s primary contact with Ford, Gary Byrd, according to the documents. Reagor and Dykes attorneys said for years Byrd conducted audits on the RDAG lots and less than a month before the company filed for bankruptcy, Byrd complimented the company on “fantastic results” in a prior audit.
“Reagor and Dykes seek discovery to determine if Shane Smith was a rogue, lone wolf, or whether Ford Credit, through its operations, was complicit in Smith’s scheme,” court documents stated. “If Ford Credit was complicit, Reagor and Dykes contend that the guaranty agreements are void.”
The documents filed on Wednesday dispute the Ford claim Reagor and Dykes are not entitled to discovery on damages and have already admitted in bankruptcy schedules on the amounts already claimed by Ford Credit.
The attorneys also dispute a $112 million amount given by Rene Leal, a financial services manager for a branch of Ford Motor Credit. They said there is no data or evidence of the accuracy of his calculations.
“Also, evidence will show that Ford Credit summarily dismissed a proposal made in the bankruptcy cases that provided for a substantial recovery for Ford Credit,” court documents stated.