LUBBOCK, Texas – A motion filed Thursday in the Reagor Dykes bankruptcy case accused Ford Motor Credit Company of knowing about fraud long before August 2018.
Reagor Dykes filed for bankruptcy at that time amid accusations of fraud and default.
A liquidation plan was approved in July 2020, but loose ends remained in the bankruptcy case as of Thursday. Among them, the bankruptcy trustee for Reagor Dykes previously filed a claim that Ford Motor Credit Company (FMCC) owes the bankruptcy estate more than $315 million.
The trustee claimed that FMCC knew about and participated in the very fraud that destroyed Reagor Dykes.
In the filing on Thursday, the trustee, Dennis Faulkner, wrote, “Ford stuck its head in the sand while happily accepting millions in payments from [Reagor Dykes] and profiting from the [Reagor Dykes’] record sales of Ford vehicles.”
In simple terms, the trustee claims that Ford made money from the fraud and stuck many businesses in Lubbock and West Texas with unpaid bills in the bankruptcy. Many Reagor Dykes customers got hurt as well – having paid for vehicles but not being able to get proper titles.
FMCC denied and continues to deny the trustee’s claims.
In the most recent filing, the trustee wants permission to go public with more than 12,000 pages of documents. FMCC asked to seal most of those records.
“Ford is doubling down on its effort to conceal the truth from the public by filing a motion to seal the very records that prove its knowledge,” the trustee wrote. “This Court should not condone Ford’s attempted cover-up.”
“Ford had actual knowledge that the Debtors were submitting false sales information long before the supposed discovery of the fraud,” the trustee also wrote.
As evidence, the trustee filed a copy of an email from an FMCC employee dated January 18, 2018. The email said, “Do not cc me on the Reagor audit items, because I do not want to know.” The email included a cartoon image of an Ostridge with its head in the sand.
In a September 9 court record, FMCC asked a judge to honor confidentiality of documentation. FMCC said trade secrets, business practices and customer confidentiality were at stake. FMCC also said there was an agreed order between the two sides and now the trustee wants to subvert it.
FMCC wrote, “Access to this confidential information would give its competitors an advantage Ford Credit does not have, as Ford Credit has no access to its competitors’ internal communications concerning such processes and procedures.”
A bankruptcy judge has not yet ruled on sealing or opening the records.