Reagor-Dykes Auto Group filed for Chapter 11 bankruptcy on August 1. This follows a civil lawsuit filed against the company by Ford Motor Credit, which had provided financing to six of Reagor-Dykes’ entities over the past few years. Now that Reagor-Dykes has filed for bankruptcy, the company’s sales and employment have decreased, and previous transactions with car buyers are now stuck in limbo.
Sarah Self-Walbrick, business reporter for the Lubbock Avalanche-Journal, says that the civil lawsuit claims included selling vehicles “out of trust” and “double-flooring” vehicles – obtaining financing twice for a single vehicle.
“Ultimately, $113 million is what we’re looking at in this main lawsuit,” Self-Walbrick says.
Reagor-Dykes remains in operation, in a reduced capacity. The company is down from 700 to 120 employees, and sales have decreased.
The repercussions of the bankruptcy have also impacted the firm’s customers. About 900 transactions were interrupted, and 100 people have filed official complaints with the Texas Department of Motor Vehicles. Self-Walbrick says that most of the consumers are dealing with title issues – documentation wasn’t received, or it wasn’t filed in the proper time frame.
“I spoke to one gentleman who traded in a vehicle…because of title issues he’s currently paying $1200 a month in car payments,” Self-Walbrick says.
Reagor-Dykes has made efforts to aid customers, and have corrected over 100 tax, title and license issues in the past few weeks. Consumers have been advised by their local tax offices to contact the dealership employee who assisted them in purchasing their vehicle.
“What consumers need to do at this point is track down where their title was in that process. Really the only way to do that is by working with Reagor-Dykes,” Self-Walbrick says.
Written by Alexia Puente