Reagor Dykes and Ford both filed briefs Monday as to why a lawsuit should or should not go forward in Lubbock federal court.

A federal district court judge will allow a portion of the lawsuit to continue, but there are strings attached. 

Ford Motor Credit Company sued a list of Reagor Dykes companies on July 31. Ford claimed that Reagor Dykes defaulted to the tune of more than $40 million.  A list of Reagor Dykes companies then filed for Chapter 11 bankruptcy. 

Normally a bankruptcy filing would automatically put the lawsuit on hold.  

However, the list of RD companies in the lawsuit did not exactly match the list of RD companies in bankruptcy.  Also, Bart Reagor and Rick Dykes did not personally file for bankruptcy, but they were both named personally in the lawsuit. 

The federal district court judge already stopped the lawsuit as it pertained to the RD companies in bankruptcy.  But the judge last week pointed out not all RD entities were bankrupt, and the judge ordered both sides to follow up. 

Reagor Dykes argued on Monday that non-bankrupt portions of the company should also be put on hold in the lawsuit. RD said the lawsuit would interfere with the creation of a reorganization plan in bankruptcy court.  RD then presented legal citations from other cases. 

Ford argued otherwise, writing in part, “Ford Credit intends to pursue its claims against the Non-Filing Reagor Dykes Defendants in this action, as such claims are not stayed by the filing of Chapter 11.”

Ford also indicated that more legal wrangling is likely to come.

“Ford Credit intends to amend its Complaint as against the … [non-bankrupt] Reagor-Dykes Defendants,” Ford said. 

After both sides filed their briefs, the judge on Monday canceled an August 8 hearing on Ford’s request to confiscate collateral property.  

The judge also gave Ford a deadline of August 17 to amend its lawsuit.  The non-bankrupt RD companies then have until August 31 to respond.

In the meantime, the bankruptcy case continues.

Court records said, “On Friday, August 3, 2018, Ford and the … [bankrupt RD companies] reached an agreement for interim use of cash collateral for a period of two weeks at which time the bankruptcy court will hold a hearing on August 16, 2018, to consider other matters relating to the future administration of the Bankruptcy Cases of the … [RD companies].”