Reagor-Dykes files reorganization plan
The Reagor-Dykes Auto Group intends to stay in business, according to court documents -- potentially under a new business name. The Chapter 11 reorganization plan includes up to $14 million from an unnamed "plan sponsor," agreements with Ford, GM, and Toyota, new consulting services to ensure smooth operations, and payments to creditors.
The auto group's mandated Chapter 11 plan includes schematics for both reorganization and Chapter 7 controlled liquidation; attorneys suggest in the plan that a successful reorganization would benefit all parties -- the business, investors, and creditors -- better than any liquidation would.
The plan filing indicates the identity of its sponsor(s) will be released in supplemental documents within the next 10 days. A definition entry in the plan suggests it will involve Ron Blaylock -- an automotive consultant from the Dallas area -- and Rick Dykes, the business's co-owner. There's no mention of Bart Reagor being involved in the post-reorganization business.
Under the restructuring plan, the plan sponsor's $14 million will go toward working capital, administrative expenses, retail lenders, payments to Ford Credit, and payments to General Motors if GM Financial agrees to provide floor plan financing to the reorganized business. The plan also includes payments to several banks, including FirstCapital Bank, First Bank & Trust, and IBC Bank.
The plan states the dealerships will stay where they were before the bankruptcy, which are owned by IBC Bank. The plan indicates IBC has allowed Rick Dykes to purchase bank the property at confidential "strike prices" to facilitate the restructuring.
The plan would set aside $750,000 for tax, title, and license agreements, facilitating payments to qualified retail lenders.
In order for this plan to proceed, it must be voted on by certain creditors involved in the bankruptcy estate; for instance, Ford Credit, GM Financial, and multiple banks. The plan notes there will not be any "distributions" of assets to Bart Reagor or Rick Dykes.
Attorneys for the auto group indicate the plan's three-year projections for income and operational expenses are "conservative, reasonable, and achievable," even without Ford Credit or GM Financial providing floor-plan financing. Attorneys claim "the business contacts and relationships the plan sponsor maintains in the industry will yield a lender to provide floor plan financing sufficient for the reorganized debtors to continue operations."
Judge Robert Jones in the U.S. Bankruptcy Court must still approve this proposal in order for it to be sent to creditors for their votes. Judge Jones will assign a due date for all ballots upon approving it.
According to the initial schedule agreed upon by the U.S. Department of Justice, the plan sponsor must put up at least $1 million by late August and Judge Jones has until early September to confirm the plan. Monday was the deadline to file this re-organization document.