Bad Books, Death Threats and a Bankruptcy: The Stunning Collapse of Reagor Dykes
After Run-In with Ford Credit, Texas Group Lands in Chapter 11
Business attorney Stephen Dietrich spoke to Automotive News about the several Reagor Dykes dealerships being sued out of trust and inaccurate financials with their lenders, resulting in the company filing for Chapter 11 bankruptcy protection. Mr. Dietrich states that liquidation for this case would be highly unlikely because it is in the interest of the lender and the automaker that the dealerships keep selling cars.
"I would be shocked if suddenly you saw those dealerships disappear," said Mr. Dietrich. "If they were really poor operators, poor performing stores or in an overdealered market, Ford might be interested in shutting them down, but that's unlikely."
Mr. Dietrich went on to say that much will depend on if the dealer can explain what happened and promise that it would not happened again. “If it's a longtime good dealer and they made some mistakes, maybe they'll be able to go forward,” said Mr. Dietrich. “But if not, the bankruptcy trustee is going to want to sell an operating, viable business to a dealer who can obtain floorplan financing.”
READ: Bad Books, Death Threats and a Bankruptcy: The Stunning Collapse of Reagor Dykes