A judge removed two important bankruptcy protections from Reagor Dykes on Thursday.
The judge allowed Toyota to terminate its dealership agreement with Reagor Dykes as of January 25. It was an agreed order, meaning Reagor Dykes and Toyota agreed to the judge making this particular ruling.
Previous court records indicated that the Reagor Dykes agreement to be a Toyota dealer was going to expire anyway. Reagor Dykes can challenge Toyota’s termination under state law, the ruling said.
The judge also allowed Ford to take back its inventory from Reagor Dykes.
Ford had already successfully stopped Reagor Dykes from using its cash collateral earlier this month. Starting in August, the bankruptcy judge said Reagor Dykes could use both Ford’s inventory and the cash that Reagor Dykes previously borrowed from Ford.
The judge on Thursday said permission was granted with the idea of keeping Reagor Dykes in operation until a buyer could be found.
In November, a potential sale of the dealerships to KamKad Automotive Group failed. A new idea took shape. The McDougal-Dykes-Ewing Group would purchase and recapitalize Reagor Dykes.
The plan included Rick Dykes who is a partner in Reagor Dykes. Ford objected.
Among Ford’s objections was that that Reagor Dykes committed fraud, and the plan called for Ford and others to release Mr. Dykes from his debts.
The bankruptcy judge wrote:
Given Reagor-Dykes’s track record during this case—the chaos at filing and the extraordinary loss of employees, the lack of capital, the multiple extensions for filing schedules, the changing of counsel, the “pivots” from one concept to another for a plan—the Court concludes that Reagor-Dykes does not have a “reasonable possibility of a successful reorganization within a reasonable time.”
Additionally, hundreds of customers cannot properly register their vehicles because of unpaid tax, title and license fees (TTLs). The reason they are not paid is because Reagor Dykes wrote checks for those fees that bounced.
Reagor Dykes was ordered to immediately cooperate with Ford.
CLICK HERE to read the order concerning Toyota.
CLICK HERE to read the order concerning Ford.
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