Lubbock-based Reagor Dykes Motor company and other related Reagor-Dykes companies filed for Chapter 11 bankruptcy on Tuesday. Chapter 11 is a form of reorganizational bankruptcy.
The move comes one day after Ford Motor Credit sued Reagor Dykes in Lubbock federal court for default.
The Ford lawsuit said Reagor Dykes agreed to pay $41 million that was described as “currently due” but the payments were “returned for insufficient funds” or because payment was stopped.
The total debt to Ford was described as more than $116 million.
In addition to those amounts, the lawsuit said Reagor Dykes owed $3.9 million of outstanding principal.
The lawsuit said Ford started an audit of Reagor Dykes in June. Having looked at 150 vehicle sales, Ford said the sales dates and other information did not match for 147 of them.
Ford accused Reagor Dykes of, in some cases, using the same vehicle twice to get financing from Ford.
In the Chapter 11 records, assets were in the category of more than $10 million but less than $50 million. Liabilities were listed in that same category.
The bankruptcy petition said, “Funds will be available for distribution to unsecured creditors.”
The Reagor Dykes company issued the following statement:
The Reagor Dykes Auto Group regrets that it became necessary this morning to seek legal protection for several of its dealerships due to a dispute with one of its lenders. We are doing everything in our power to work through the issues. We are eternally grateful for our loyal employees, customers and friends in Lubbock and the West Texas community.
Rick Dykes and Bart Reagor
The bankruptcy docket sheet listed 14 Reagor-Dykes entries although a couple entries appeared to be duplicates.