Bart Reagor along with Reagor-Dykes II, Reagor-Dykes Auto Mall I, and Reagor-Dykes III filed their defense Thursday evening in federal court.
Mr. Reagor’s response came separately after Rick Dykes responded.
While Dykes clearly laid blame at the feet of the company’s former Chief Financial Officer, Shane Smith, Reagor did not mention him except to acknowledge he is a former manager within the Reagor Dykes companies.
On July 31, Ford Motor Credit Company sued Reagor Dykes (RD) saying the Lubbock-based group of auto dealerships defaulted on roughly $40 million of debt. Ford later accused Reagor Dykes of outright fraud.
On August 1, a list of RD companies filed for Chapter 11 bankruptcy. Both the lawsuit and the bankruptcy are ongoing.
The bankrupt RD companies have protection from the lawsuit, but three RD companies did not file for bankruptcy. Bart Reagor and Rick Dykes did not file for bankruptcy personally.
Mr. Reagor’s answer in court records said, “Ford Credit’s claims are barred in whole or in part because of their failure to exercise ordinary care.”
It also said, “Ford Credit’s claims are barred by the doctrine of unclean hands.”
Reagor’s answer did not spell out certain details. But Dykes’ answer said Ford had given RD a clean audit in June. Then, during a surprise audit in July, irregularities were found.
For example, Ford’s lawsuit said 150 vehicle sales were audited and 147 sale records did not match information that was submitted to the Texas Department of Motor Vehicles. Reagor denied the allegation.
Ford’s lawsuit said the average discrepancy was 55 days between actual sale date and sales records. Reagor said he and his companies were “without knowledge or information” to properly address the allegation. But he denied the allegation.
Ford’s lawsuit said RD double-financed the same vehicle in some instances to borrow extra money in violation of RD’s agreement with Ford. Reagor again said he did not have sufficient information but denied the allegation.
At one point, Reagor’s response said, “Because of the focus on reorganization efforts, the Defendants have been unable to obtain sufficient information to deal with this litigation”
Reagor’s response said he couldn’t vouch for the amount of money he and his companies owe Ford, however, he did make an admission.
“As of the date of this complaint, the Reagor-Dykes Guarantors have not paid the amounts currently due,” Reagor said.
But then Reagor and his companies laid the groundwork to file a lawsuit against Ford.
Reagor’s answer said, “Defendants reserve the right to assert potential counterclaims, to supplement and amend this answer and the affirmative defenses, and to assert any other grounds to deny any recovery to Ford Credit or to add any cross-claim and/or third-party claim.”
CLICK HERE to read Reagor and his companies’ full answer.
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