A bankruptcy judge on Tuesday gave permission to sell 13 Reagor Dykes locations at auction, and the judge also approved the KamKad Automotive Group as a so-called stalking-horse bidder.
KamKad gets the first bid which will be more than $25 million. Others can bid more for a November 15 auction. The winning bidder gets the properties more-or-less free and clear.
RD debt will, for the most part, stay with the bankruptcy court. The sale money will also stay with the bankruptcy court, and then the court will decide which debts get paid with the available money.
The bankruptcy judge on Tuesday also approved Reagor Dykes (RD) spending money on immediate expenses like paying employees until October 18. Previous rulings did not allow for the payment of rent, but this time the judge included rent.
Ford Motor Credit Company wanted RD to put off rent until there is a new owner.
Ford sued RD on July 31 with allegations that RD defaulted on roughly $40 million. Ford also accused RD of fraud.
Ford, General Motors and Toyota filed objections before Tuesday saying that KamKad cannot take over the RD dealerships without permission from the big name auto-makers.
For example, GM said, “The right to operate as a GM dealer is GM’s right to grant.” It can’t be granted by a bankruptcy court or a the highest bidder at auction.
To fix this issue, KamKad will spend two weeks, according to information presented in court, working with RD and the big-name auto makers to negotiate written agreements.
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