An offer to buy Reagor Dykes was entered into court records Tuesday morning for  $25,321,520.00.  The offer comes from a company called KamKad which has agreed to act as the stalking horse bidder if the court agrees to auction off Reagor Dykes (RD).

A stalking horse bid is a way to make sure assets are not sold for too little.  In this case, anyone who wants to purchase the RD companies would have to bid $1 million more than KamKad.

Subject to bankruptcy court approval, bidding materials would be due by November 16.  The auction would happen November 20 in Dallas.  The assets of RD (not RD companies or debt) would be sold at auction.

The debt would stay with the bankruptcy court as would the proceeds of the sale. 

Court records said $15 million of the current stalking horse bid is for goodwill, nearly $3 million is for parts, more than $5 million is for furniture, fixtures and equipment and more than $2 million is for lease-holding interests.  

A small number of assumed liabilities would come with the purchase.  Those would be amounts owed for permits, licenses or other regulatory requirements.  It might also include “specified liabilities to be agreed by the parties.” 

  • CLICK HERE to see the motion for an auction and stalking horse bidder.
  • CLICK HERE to see exhibit B of the motion. 

If KamKad does not get the winning bid as a stalking horse bidder, then it is entitled to $750,000 as a break-up.  Court records describe the break-up fee as a normal component to encourage bidding.  KamKad had to agree to put up $1 million up front as a show of good faith for the bid.

Court documents indicate that RD companies “operate eight (8) dealerships with thirteen (13) locations – twelve (12) in West Texas and one (1) location in Dallas…” 

A list of Reagor Dykes companies filed for bankruptcy on August 1. Ford Motor Credit Company accused RD of fraud and defaulting on $40 million of debt. There are indications that both the bankrupt and also the non-bankrupt RD companies are now under the control of a court-appointed Chief Restructuring Officer.  

Court records on Tuesday included a letter of intent dated September 10, and signed by the CRO.  There were no signatures from Bart Reagor and Rick Dykes nor were their names listed on the letter of intent.

KamKad is a group of automotive dealerships that operate in McKinney, Dallas, and Huntsville.  

Related Stories: Reagor Dykes – extended coverage of the bankruptcy