Lubbock-based Reagor Dykes Auto Group and other related Reagor Dykes companies filed for Chapter 11 bankruptcy on Tuesday. Chapter 11 is a form of reorganizational bankruptcy.
While it is too early to tell what will happen until the court case, Lubbock County tax assessor collector Ronnie Keister said customers in the midst of a car deal should contact Reagor Dykes and the bank they are financing with for current updates.
“You want to follow up with Reagor and follow up regularly. When titles are going to free up or not free up, you want to make sure you are on their mind and get your stuff processed as fast as you can,” Keister said.
Related Story: Reagor Dykes companies file for Chapter 11 bankruptcy
When a company files for a Chapter 11 bankruptcy, typically it is because creditors have a judgment against the company, said Robert St. Clair, an Attorney at Law who specializes in bankruptcy for Fargason, Booth, St. Clair, Richards & Wilkins, LLP.
“There’s been a lawsuit filed and you can’t afford to defend it, or it’s indefensible,” said St. Clair.
He said it is also a chance to give businesses more time to pay their debt back.
“That’s merely taking the existing loans they have and trying to rewrite the terms of those loans, like the payment period, payment amounts, interest rates those kind of things,” he said.
It is possible a company filing for Chapter 11 bankruptcy could appoint a trustee within a few weeks or months of filing.
“In a lot of big Chapter 11 cases, sometimes the secured creditors or unsecured creditors get together and they decided to ask the court to appoint the trustee to oversee the bankruptcy filing as opposed to the business management continuing to manage its own business,” said St. Clair.
St. Clair believed it could take several weeks or months to get any issues fixed if someone was in the middle of a car deal, but it depends on what happens in court.
However, as of Thursday, Keister said Reagor-Dykes and associated businesses are still operating as usual.