LUBBOCK, Texas (KCBD) - First Bank & Trust has filed a motion asking the court to move the Reagor-Dykes companies from Chapter 11 bankruptcy, aimed at restructuring and preserving the dealerships, to Chapter 7 bankruptcy, which would liquidate all the assets and end Reagor-Dykes as a going concern.
In court documents filed Monday, the bank claims that there is no way Reagor-Dykes could restructure itself as a going concern, and that to continue to delay the conversion to Chapter 7 will impose further administrative costs on all its creditors.
First Bank & Trust says, "These cases have proceeded in Chapter 11 for a year with no progress at the cost of over $5 million in unpaid administrative claims... The cases have been operated in a chaotic manner with repeated promises of various forms of resolution which - at great cost - have never come to fruition."
FB&T says the court should move forward with liquidation because RDAG (the Debtors) have failed to file timely monthly reports and were unable to confirm a reorganization plan by the court deadline of Sept. 3. FB&T claims that the Debtors will be unable to rehabilitate their businesses as going concerns, given the loss of their estates.
FB&T says the dealerships are just trying to "buy more time" and that their reorganization plan is not viable.
FB&T says, "By their silence and filing of dozens of late monthly operating reports over the past few days, the Debtors admit their failure to timely file monthly reports. Debtors make no attempt to offer an excuse for months of disregarding this obligation. Once again, these Debtors have taken actions required to operate in Chapter 11 only when faced with a dispositive deadline."
FB&T claims the Debtors have not been able to provide "a contractually binding commitment for the huge funding that would be required to cure the losses they inflicted on consumers in the pre-petition period, re-acquire vehicle inventory for sever allocations, pay rent on leaseholds for those locations, and provide financing to new consumers and pay-offs of debt on their trade-in vehicles – and satisfy the large administrative expense claims.The many unfulfilled promises of the last year and the evidence presented in the Conversion Motion show that there is no prospect they can so rehabilitate their businesses."
First Bank & Trust is asking the court to deny RDAG’s motions for continuance and rule on the conversion to Chapter 7 bankruptcy in October.