LUBBOCK, TX (KCBD) - FirstBank & Trust officials filed a response in opposition to Reagor Dykes Auto Group’s motion to compel global mediation in their bankruptcy case on Wednesday.
FirstBank & Trust is the holder of claims in the bankruptcy case for Reagor Auto Mall. FirstCapital Bank of Texas is the other principal lender in the RAM case.
Attorneys for FirstBank & Trust and FirstCapital Bank of Texas claim to have repeatedly tried to resolve their claims by means of agreement with RAM. However, the banks’ attorneys say RAM has consistently declined to accept or counteroffer the resolution offered. The banks believe RDAG officials are not sincerely interested in compromise and settlement of disputes.
The motion says the logistics involved in the mediation are simply not feasible.
“There are eleven bankruptcy cases with hundreds of creditors, all of which have differing claims against different debtors will different prospects of recovery. No mediator could meaningfully engage all the constituencies and differing claims in a mediation,” the motion stated.
“The true motive for the Motion appears not to be such an impossible mediation, but instead securing a stay on pending motions. This actually represents a request for an injunction against continued litigation, but the Debtors offer no grounds to meet the four common elements of injunctive relief used on occasion pursuant to Section 105(a).”
The motion says the creditors in these cases have waited for six months while RDAG sought a sale and then a reorganization plan. “Those efforts failed,” the statement said. “Unless and until the cases are converted to Chapter 7 liquidation, the Debtors remain able to amend their plan, file a supporting disclosure statement, and seek confirmation through direct negotiation with holders of claims or by cramdown.”
The mediation is requested to be on Feb. 20, 2019, a date already reserved for hearings in these cases.
There is a telephonic hearing scheduled for Thursday at 2:30 p.m. in which Reagor-Dykes Auto Group will argue its motion for mediation.