KamKad, Reagor-Dykes execute purchase agreement
KamKad Automotive and the Reagor-Dykes Auto Group have entered a purchase agreement as part of the bidding process in bankruptcy proceedings.
The Reagor-Dykes Auto Group is one step closer to being sold, a process expected to be complete by the end of November.
An asset purchase agreement has been filed in U.S. Bankruptcy Court, laying out the terms for stalking horse bidder KamKad Automotive Holdings, LLC to purchase the Auto Group. Each step in the process must be approved by the Court.
A total price is not listed in the agreement. It does list a sum of: $15 million in intangibles and goodwill, plus cost of all new and used vehicles in inventory, parts, accessories and other related costs.
During a court hearing a few weeks ago, the judge approved the bid procedures with this agreement to be executed by Oct. 1. The judge also accepted a bid date of mid-November. Provided other procedural hurdles are cleared, this would allow sale to be closed by the end of November.
KamKad deposited $200,000 to an escrow account Sept. 21. According to the agreement, KamKad will deposit another $800,000 on Monday or Tuesday. This will be a deposit toward purchase price.
According to another recent court document, filed by the Reagor-Dykes chief restructuring officer proposing terms to be agreed, the purchaser is not an insider or affiliate of Reagor-Dykes Auto Group; neither the purchaser nor any of its affiliates or agents have any connection or agreements that would violate Bankruptcy Code.
Also in this filing, proposed terms detail that KamKad will not be a successor of claims against Reagor-Dykes:
"The Purchaser is not a mere continuation of the Debtors or their estates and there is no continuity of enterprise between the Debtors and the Purchaser. The Purchaser is not holding itself out to the public as a continuation of the Debtors. The Purchaser is not a successor to the Debtors or their estates and the sale does not amount to a consolidation, merger, or de factor merger of the Purchaser and the Debtors. Under no circumstances shall the Purchaser be deemed a successor of or to the Debtors for any claim or Encumbrance against or in the Debtors or the Assets."
In court testimony, the chief restructuring officer has previously said Reagor-Dykes' employee count has dropped from between 700 to 800, now down to around 120. This agreement states KamKad is not required to hire any Reagor-Dykes employees; but, KamKad can conduct employee interviews and may hire staff members. Any employees hired will be new employees.
It is the intention of Purchaser, and Sellers hereby acknowledge such intention, that any employees of Sellers that Purchaser hires will be new employees of Purchaser as of the Closing Date or the date of hire, whichever is later. Such new employees shall only be entitled to such compensation and employee benefits as are agreed to by such employees and Purchaser, or as are otherwise provided by Purchaser, in its sole discretion. Purchaser will assume no liability of Sellers for any sums which become due or which accrue to the employees of Sellers through and including the Closing Date. Purchaser specifically does not commit to hire any of the employees of the Business, and Sellers specifically understand and acknowledge this fact. However, notwithstanding Purchaser’s position, Purchaser shall be entitled to review employee records and conduct employee interviews. Sellers agree that after the Effective Date they will make, on a confidential basis, their respective employee records available to Purchaser and permit Purchaser to contact its employees for the purpose of conducting employee interviews. Sellers further agree to make employees designated by Purchaser available to Purchaser for such purpose.
Ford Motor Credit sued the Reagor-Dykes Auto Group, Bart Reagor and Rick Dykes July 31, claiming massive floor plan financing fraud and that vehicles were sold out of trust. The next day many, but not all, Reagor-Dykes companies filed for bankruptcy protection.
Here is the asset purchase agreement pdf:
SEPT. 24: FirstCapital Bank requests First Bank & Trust lawsuit against it, Reagor-Dykes, others move to federal court
SEPT. 21: Judge sets schedule, trial date in Vista Bank v FirstCapital Bank lawsuit
SEPT. 21: Former Reagor-Dykes CFO denies late payments, says Vista Bank attacked him, his family
SEPT. 20: Vista Bank sues former Reagor-Dykes CFO, claims loan default
SEPT. 19: Texas DMV: Reagor-Dykes should promptly resolve title issues
SEPT. 19: Brad, Kenneth Burgess file motion to dismiss Vista Bank lawsuit
SEPT. 18: First Capital Bank files motion to dismiss lawsuit
SEPT. 18: Court approves bid process for Reagor-Dykes Auto Group, extends use of cash collateral
SEPT. 17: Ford Credit, GM object to certain aspects of proposed Reagor-Dykes sale
SEPT. 14: Judge sets trial date in Ford Credit lawsuit vs. Reagor-Dykes
SEPT. 14: Reagor denies Ford Credit's claim vehicles sold out of trust
SEPT. 13: Dykes: Former Reagor-Dykes CFO admits he provided false info to Ford Credit
SEPT. 11: 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