Bankruptcy judge approves Vista Bank’s $7.5M settlement with RDAG estate

Bankruptcy judge approves Vista Bank’s $7.5M settlement with RDAG estate
Court documents also describe years of emails between RDAG CFO Shane Smith and bank officers regarding overdrafts and unconventional hours kept so that after-hours bank deposits could be made by RDAG suggesting a causal relationship between the favors done for Steinmetz and the bank’s habitual tolerance of RDAG overdrafts. (Source: RDAG, Vista Bank)

LUBBOCK, Texas (KCBD) - Federal Bankruptcy Judge Robert L. Jones approved the $7.5 million settlement between Vista Bank and the Reagor-Dykes Auto Group bankruptcy estate in a hearing on Feb. 26, 2020.

Earlier this month, Vista Bank agreed to settle with RDAG and pay $7.5 million to the RDAG bankruptcy estate. Vista Bank also forfeited all claims, demands and any future distribution of assets that may result from the administration of the RDAG bankruptcy estate case.

This approval will protect Vista Bank against actions by the bankruptcy court.

In a statement issued Wednesday morning, Vista Bank officials state:

Vista Bank is pleased that the Court has approved our settlement in this matter, which definitely allows Vista to avoid the time, expense and distraction of protracted litigation while moving forward with the important work of serving our clients.

A previous statement from Vista Bank’s attorney Fernando Bustos said in part, “While there was no wrongdoing by Vista Bank, my client chose to eliminate the opportunity cost associated with prolonged litigation by resolving several no-fault claims.”

This settlement was filed the day before a hearing to decide whether to liquidate the Reagor-Dykes companies or to keep it in reorganization.

Related Story: Attorney General weighs in on Reagor Dykes case

The agreement also comes two weeks after the the court appointed Special Litigation Counsel in the bankruptcy case, Andrew Seger, filed documents claiming Vista Bank “benefited from and actively facilitated the fraud" that led to the collapse of the auto giant.

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