GM says Reagor Dykes has no right to “convey” Chevy dealership status

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Reagor Dykes objection 720

General Motors on Monday filed an objection in the Reagor Dykes bankruptcy case saying 13 Reagor Dykes locations cannot be auctioned off until a particular problem is fixed.

Toyota and Ford filed similar objections already.  The General Motors (GM) objection said in part: 

“No GM dealership can operate without the consent of GM, nor can any party become a GM dealer operator or operate a GM dealership without the consent and approval of GM. The GM dealer services agreement is personal to the operators with whom GM has contracted. This is not a property right the Debtors [Reagor Dykes] have the ability to convey. The right to operate as a GM dealer is GM’s right to grant, and the ability to operate a GM franchise is neither property of the estate nor something that can be conveyed or purchased. Debtors may be able to convey the physical dealership assets, but it cannot sell its status as a Chevrolet dealer.”

A court hearing was scheduled for Tuesday, September 17 on the issue of selling RD locations. 

On July 31, Ford accused RD of defaulting on roughly $40 million of debt. A list of RD companies filed for bankruptcy the next day. 

If approved, the bankruptcy court would sell RD locations on November 20.  The starting bid was already submitted in court by the KamKad Automotive Group for a little more than $25 million.  KamKad has Alfa Romeo and Hyundai dealerships but not Ford, GM and Toyota. 

Related Stories: Reagor Dykes – extended coverage of the bankruptcy 

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