LUBBOCK, Texas (KCBD) - The court hearing that could have decided whether the Reagor Dykes estates stay in reorganization or are liquidated under Chapter 7 bankruptcy law has been continued until March 24, 2020.
On that day, the court will also be asked to approve an agreement proposed by the Texas Attorney General that would establish a Consumer Ombudsman to handle the outstanding consumer issues.
Filings in the RDAG bankruptcy case by the Texas Attorney General reveal Reagor-Dykes has “resolved approximately 90 percent of the initial consumer issues” but 108 consumers still do not have titles to their vehicles.
The agreement by the Texas Attorney General proposes $500,000 to be allocated to help resolve the issues for the 108 consumers. Other details about the agreement have not been revealed in court documents.
Attorney for the Reagor Dykes estates, Marcus Helt, commented in the hearing the consumer issues should be resolved in two years, but hopefully before.
The Texas Attorney General filed an objection to the motion to convert the bankruptcy to a chapter 7 liquidation earlier this week.
The filing states counsel for debtors and counsel for Rick Dykes are “putting the final touches to a settlement that should resolve the balance of the remaining consumer issues.” It calls “new money” contributed by Rick Dykes to be seed money for a Consumer Ombudsman, the “keystone” of the agreement. The Ombudsman would be a “fiduciary working on behalf of the consumers.”
The Consumer Ombudsman’s fees would be capped at $75,000 and would be empowered to hire professionals to help resolve the consumer issues.
The Consumer Ombudsman has not been approved, but is expected to be decided in the March hearing.
Judge Robert Jones expressed his dissatisfaction with the length of time this has taken.
"The case has no real assets except intangible assets and hundreds of millions in claims and millions of administrative expenses,” he said. "I’m sympathetic to the consumers for many reasons …one is I’m quite sure they are innocent in this situation.”
He goes on to say that he is not sure there is any way to make this fair to anyone.
There was a conversation during the hearing about the settlement between Vista Bank and Reagor-Dykes estates in bankruptcy. An expedited hearing was requested by the RDAG estates counsel, regardless of when the hearing about the conversion from chapter 11 bankruptcy to chapter 7 bankruptcy is held.
The judge has not set a date on the hearing for the Vista Bank settlement.