Dykes Affidavit: “Ford Credit knew or should have known”

Rick Dykes blames Ford Credit, former CFO for RDAG collapse

LUBBOCK, TX (KCBD) - Rick Dykes lays the blame for the collapse of his dealership group at the feet of Shane Smith, Ford Motor Credit, and Ford employee Gary Byrd.

That’s according to a six-page affidavit released Friday in connection with the ongoing bankruptcy case involving the Reagor-Dykes Auto Group.

Dykes, who said his role in the group was primarily as an investor, told the court in his statement that he had “no day-to-day management” in RDAG and that he only learned about issues involving the dealership after Ford Motor Credit’s emergency audit in late July of 2018.

“Y’all have some big problems,” Dykes said Gary Byrd told him on July 28, adding that only then did he learn of additional ‘red flags’ of the auto group’s alleged inappropriate reporting of sales that were ‘out-of-trust.’

“How long has this been going on?” Dykes said he asked Byrd. “For quite a while,” was the response. “Why weren’t Bart and I notified about this?” Dykes asked.

That’s when he said Byrd gave him a ‘blank expression’ and replied “Well, I did tell Shane,” meaning former Chief Financial Officer Shane Smith.

Dykes states because of that conversation, he strongly suspected Byrd and possibly others at Ford Credit were aware of what was happening and that Ford’s “Indulgence of such out-of-trust sales” was extending credit to RDAG without approval or guarantee from Dykes or Reagor.

He pointed toward Shane Smith’s Fifth Amendment plea as odd, stating he answered all questions posed “to the best of my ability," and added that Byrd refused to answer questions during his deposition, stating the refusal was “consistent with my suspicion from my exchange with him.”

Dykes said since the bankruptcy he has come to conclude that the value of inventory reported from RDAG to Ford Credit was a ‘clear signal’ that Ford was “either ignoring or allowing” the out-of trust sales.

He continually stated neither he or Bart Reagor ever approved any sales, and said reviews of quarterly audits by RDAG accounting personnel have shown similar issues from the end of 2016 until June of 2018.

Dykes said as the reorganization of the auto group comes to a close, the financial data will be available for a “forensic review” and that such a review will reveal his suspicions.

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