A major lender involved in the Reagor Dykes bankruptcy case has settled the issue of unpaid tax, title and license. The latest lender to settle the issue, according to court documents filed Friday, was TD Auto Finance.
Hundreds of customers who did business with Reagor Dykes in the days or weeks before August 1 have been unable to properly register their new vehicles. Others have been required to make payments on vehicles they don’t even possess.
Back in mid-October, Ford Motor Credit Company indicated in court records it already took action to fix the problem of tax, title and license (TTL) for its customers.
TD Auto was the second biggest retail lender in the case, which involved 60 retail lenders and 70 lienholders.
Initially there were 781 customers impacted by TTL. Roughly 300 were then resolved but then 292 more were found. Additionally, 200 customers have problems with trade-in liens.
The way it worked before bankruptcy was this: customers paid or borrowed enough money to cover the purchase price plus TTL. Reagor Dykes would then pay the TTL and file the paperwork. But when Reagor Dykes filed for bankruptcy on August 1, millions of dollars of checks drawn on local banks bounced.
The checks that would normally pay TTL bounced, and so county tax assessors and other officials could not finish processing titles. Trade-in liens worked the same way and those checks also bounced.
Many lenders object to paying TTL because they already put up the money once. The retail lenders have essentially been asked to pay the same fees twice because Reagor Dykes cannot pay.
Of the first six Reagor Dykes companies to file for bankruptcy, a negative net worth of more than $35 million was listed in court records. More Reagor Dykes companies filed for bankruptcy on Friday.
As part of TD Auto’s agreement, TD will provide vehicle information to Reagor Dykes. Reagor Dykes will, with that information, contact the Texas Department of Motor Vehicles or other government officials to get precise information on how much money is required to fix the TTL issue.
Once information is confirmed, TD will pay within five business days. There are also provisions to pay off trade liens.
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