FirstCapital asks judge to end RDAG reorganization plans, forcing liquidation
LUBBOCK, Texas (KCBD) - FirstCapital Bank of Texas asked a judge to end Reagor-Dykes reorganization plans on Wednesday, a move that would effectively force the dealership into liquidation.
The bank says a proposed Plan Sponsor, The Henry Group, has pulled out and the dealership continues to lose money.
FirstCapital told the court the dealerships have suffered significant losses in 2019 and the bank stands to lose $12 million.
FirstCapital said the reorganization plan was based on "unrealistic promises" and "there is no reasonable likelihood of reorganization."
Reagor-Dykes initially filed for bankruptcy in August of 2018, almost 18 months ago.
FirstCapital told the court without a Plan Sponsor, the bankruptcy should change from a Chapter 11 to a Chapter 7.
The court will take up this motion at the next hearing on Feb. 12.
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