Reagor denies Ford Credit's claim vehicles sold out of trust

Reagor denies Ford Credit's claim vehicles sold out of trust

LUBBOCK, Texas -

Responding to Ford Motor Credit's lawsuit, a late Thursday filing on behalf of Bart Reagor and Reagor-Dykes companies that have not filed for bankruptcy, the defendants deny vehicles were sold out of trust.

Rick Dykes filed his response detailed here, which was more pointed placing blame on former chief financial officer Shane Smith. The filing detailed in this article is for Bart Reagor, Reagor-Dykes II, LLC, Reagor-Dykes Auto Mall I, LLC and Reagor-Dykes III, LLC. The response notes it is not on behalf of Rick Dykes, who is separately represented.

As reported earlier, Ford Credit commended Reagor-Dykes following its June audit. New details in Dykes' response show the Auto Group's short-term indebtedness to Ford Credit was about $25 million as of the June audit. But, according to Dykes' filing, Ford Credit notified Smith of irregularities it found in numbers supplied to Ford Credit. Dykes states neither he nor co-owner Bart Reagor were made aware of Ford Credit's impending July 26 on-site review; they were both out of town. According to Dykes' response, it was on that day Smith contacted Reagor and Dykes. They returned to Lubbock the next two days. 

Ford Credit sued several Reagor-Dykes companies as well as co-owners Dykes and Reagor July 31, claiming $116 million owed with $41 million due now. The next day many, but not all, Reagor-Dykes companies filed for chapter 11 protection. Reagor and Dykes individually did not, though recent filings show both the co-owners and other R-D companies that did not file for chapter 11 may soon do so. 

Reagor's response denies Ford Credit's claim that 147 of 150 vehicles sales reviewed by Ford Credit showed reported sales dates did not match DMV or other publicly available data. It also denies the claim that the average discrepancy of this reporting was 55 days.

The response goes line by line denying many of Ford Motor Credit's claims, starting on page 58 in the pdf below.

In some instances, the response states defendants are "without knowledge of information sufficient to form a belief as to the truth of the allegations". This is the response to Ford Credit's allegation of Reagor-Dykes receiving double-financing from Ford Credit.

Reagor denies the estimated amount outstanding to Ford Credit is $113,374,000.00 with $40,434,000.00 due now.

This filing does state Reagor and these Reagor-Dykes companies reserve the right to allege any and all other defenses against Ford Credit. 

Further, it states Ford Credit's claims are "barred by the doctrine of unclean hands." No details are given on whose hands. In Dykes' response, he questions the relationship between Ford Credit's Dallas regional manager who oversaw its transactions with the Auto Group and the former Reagor-Dykes chief financial officer.

Similar to Dykes' response, this filing notes there has not been adequate time to focus on this law suit because of the complicated nature of the Reagor-Dykes Auto Group filing for bankruptcy and now working with a chief restructuring officer. The response states the defendants "reserve the right right to assert potential counterclaims, to supplement and amend this answer and the affirmative defenses, and to assert any other grounds to deny any recovery to Ford Credit or to add any cross-claim and/or third-party claim."

Senior U.S. District Judge Sam Cummings last month granted an extension for defendants in the suit to respond. That deadline is Friday. The defendants had requested a date of Oct. 1.

THU: Dykes: Former Reagor-Dykes CFO admits he provided false info to Ford Credit
TUES: Reagor-Dykes Auto Group requests court to allow sale of company
SEPT. 4: Reagor-Dykes Auto Group establishes process to resolve customer problems
AUG. 31: International Bank of Commerce asks for court to allow it to foreclose on Reagor-Dykes dealerships
AUG. 31: More Reagor-Dykes companies, co-owners may soon file for chapter 11
AUG. 30: Court extends Reagor-Dykes employment of CRO; officer discusses potential dealership buyers
AUG. 29 : International Bank of Commerce asks for loan payment in Reagor-Dykes case
AUG. 29: Ford Credit objects to Reagor-Dykes earlier legal team
AUG. 27: Vista Bank doubles relief request in new federal suit against FirstCapital Bank
AUG. 25: Reagor-Dykes chief restructuring officer hires new legal team
AUG. 25: GM proceeding with termination of Reagor-Dykes Floydada
AUG. 23: Landlords demand rent for Reagor-Dykes dealerships in Lubbock, Plainview
AUG. 20: Ford Credit moves ahead with suit against Reagor, Dykes, some R-D companies
AUG. 18: Reagor-Dykes bankruptcy case: Read court order following Aug. 16 hearing
AUG. 17: Auto dealer claims Reagor-Dykes owes $513,000, vehicles may be in consumers' possession
AUG. 16: Vista Bank sues FirstCapital for $6 million, claims Dykes helped perpetrate check kiting scheme
AUG. 16: Bankruptcy court allows Reagor-Dykes continued use of cash collateral, hiring of CRO
AUG. 15: Reagor-Dykes Auto Group issues written apology
AUG. 14: Loss of Reagor-Dykes Chevrolet in Floydada a potential financial pitfall for city
AUG. 14: Vehicle auction company claims Reagor-Dykes owes it $687,000
AUG. 14: Ford Credit claims Reagor-Dykes is not following court orders; court grants extension to file docs
AUG. 13: U.S. Trustee opposes Reagor-Dykes request to hire chief restructuring officer
AUG. 10: Ford Credit: Reagor-Dykes fraud may be among largest of its type in U.S. history; GM files to terminate Floydada dealership
AUG. 9: Reagor-Dykes questions former CFO’s actions; Contractor claims $700,000 due now
AUG. 7: Former Reagor-Dykes employees claim they were not paid
AUG. 6: Customers concerned over Reagor-Dykes 'unwinding' process
AUG. 6: Ford suit against Reagor-Dykes on hold while bankruptcy case proceeds
AUG. 3: Judge approves Reagor-Dykes employee pay
AUG. 2: Mayor: Downtown Lubbock growth to remain strong regardless of Reagor-Dykes future
INITIAL STORY: Ford Motor Credit sues Reagor-Dykes; R-D files for chapter 11 bankruptcy

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