Ford Motor Credit objects to Reagor-Dykes Auto Group using Mullin Hoard & Brown

From August 1, 2018 through August 21, 2018

Ford Motor Credit objects to Reagor-Dykes Auto Group using Mullin Hoard & Brown
(Source: Mullin Hoard & Brown)

LUBBOCK, TX (KCBD) - Ford Motor Credit Company LLC (“Ford Credit”) has objected to the motion to employ Mullin Hoard & Brown L.L.P., as counsel for Reagor-Dykes Auto Group from August 1, 2018 through August 21, 2018.

Reagor-Dykes Auto Group’s Chief Restructuring Officer fired Mullin Hoard & Brown earlier in August. On August 29, 2018, Ford Motor Credit filed an objection to Reagor-Dykes Auto Group’s request to hire new attorneys for their bankruptcy case.

The law firm of Mullin Hoard & Brown asked for payment for their services provided to Reagor-Dykes Auto Group from August 1 to August 21.

Court documents say Bart Reagor and Rick Dykes used their personal money to pay a $500,000 retainer fee for the law firm.

The payment of Mullin Hoard & Brown’s retainer by limited partners of Reagor-Dykes Auto Group, the actions of Mullin Hoard & Brown while retained as Reagor-Dykes Auto Group counsel and the fact that Mullin Hoard & Brown has represented one of the limited partners previously, indicate that Mullin Hoard & Brown holds an adverse interest to the bankruptcy estate and therefor may not be retained as counsel to the Debtors. 

According to the court documents, the factual and legal relationship between Bart Reagor, Rick Dykes, Reagor-Dykes Auto Group, Mullin Hoard & Brown, and the fee arrangement was not fully disclosed to the Court at the outset of the bankruptcy representation. The documents say Mullin Hoard & Brown failed to timely file and serve the requisite statement within 14 days of receipt of the retainer and/or agreement regarding attorneys’ fees.

Ford also states in the documents Mullin Hoard & Brown has admitted that the firm previously represented Rick Dykes individually and was replaced as Reagor-Dykes Auto Group counsel by the advice of the Chief Restructuring Officer.

According to Ford, Mullin Hoard & Brown’s behavior while acting as Debtors’ counsel indicates Mullin Hoard & Brown felt loyalty to the partners and guarantors of the Debtors. As Debtors’ counsel, Mullin Hoard & Brown never filed schedules, failed to address contracts in transit and instead focused their efforts on finding fault with Ford Credit, an action which benefits the guarantors of the Debtors rather than the bankruptcy estate.

There is an October 5, 2018 bankruptcy court date to discuss this specific matter.

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