Ford Motor Credit Company on Monday filed court documents claiming that Bart Reagor and Rick Dykes personally owe more than $100 million.
Ford sued the Reagor Dykes companies on July 31 with allegations of fraud and default. The companies have filed for bankruptcy and so they have certain legal protections against the lawsuit. But Mr. Reagor and Mr. Dykes have not filed for bankruptcy personally and Ford’s lawsuit continues against them.
Long before the RD companies collapsed, Mr. Reagor and Mr. Dykes signed contracts with Ford. Those contracts include a personal guaranty. Reagor and Dykes both contractually promised to take responsibility if their dealerships could not pay back debt to Ford.
The personal guaranty is the primary basis of Ford’s claim against the two men.
In late January, Mr. Reagor and Mr. Dykes filed a motion to slow down the case – saying in part there might be evidence that Ford contributed to the downfall of the Reagor Dykes companies.
The legal theory went like this: if one or more Ford employees participated in the Reagor Dykes fraud, then Ford cannot enforce the guaranty.
Mr. Reagor and Mr. Dykes claim to know nothing about auto financing fraud or bank fraud. Instead they blame fired CFO Shane Smith.
Ford claims that legally and factually, the two Lubbock men cannot prove that Ford participated in fraud “against itself.”
“Yet they have not even hinted at a single fact that would support such bizarre speculation nor demonstrated any motive,” Ford said in court records.
Ford said the Reagor Dykes dealerships collectively owe Ford $109,091,460.95, and unnecessary delays only make it harder for Ford to collect.
Ford asked that it be allowed to have a summary judgement. In other words, Mr. Reagor and Mr. Dykes should be ordered to pay without even taking the lawsuit to trial.
CLICK HERE to read the most recent court document from Ford.
Lurking behind Defendants’ motion is this important reality: a delay in proceeding on Ford Credit’s Motion for Summary Judgment would benefit Defendants and potentially prejudice Ford Credit. Defendants Reagor and Dykes stood at the helm of the Dealerships, reaping the reward in good times. They admittedly personally guaranteed the Dealerships’ obligations to Ford Credit and face receiving a joint-and-several judgment in this case exceeding $100 million. Although they placed the Dealerships in bankruptcy and subjected the Dealerships’ assets to the bankruptcy proceedings and the judgments of the Chief Restructuring Officer, they did not subject themselves to the bankruptcy process. Their own, personal assets—necessary to pay a judgment in this case— are not subject to those proceedings. Accordingly, Reagor and Dykes may believe that they are free to liquidate or dissipate assets which otherwise would be used to satisfy a judgment in favor of Ford Credit. Any further delay in the summary judgment proceedings would give Defendants additional time to potentially liquidate assets and place associated proceeds beyond the reach of Ford Credit and jeopardize the utility of a judgment in Ford Credit’s favor.