Late Thursday night, Reagor Dykes filed a motion in federal court to stop a lawsuit filed this week by Ford Motor Credit Company. The court docket indicated the motion was filed electronically a few minutes before midnight.

The motion said several Reagor Dykes companies filed for Chapter 11 bankruptcy.

It said, “It therefore appears that 11 U.S.C. Section 362 would prohibit proceeding against Reagor Dykes…”  (See update below.)

That does not mean the dispute between Ford and Reagor Dykes is over.  It means the focus turns from federal district court to bankruptcy court. 

Ford sued a list of Reagor Dykes companies on Tuesday – saying the companies were in default by $40 million or more.  In the bankruptcy case, new documents were filed late Thursday night to deny those allegations.

“The debtors dispute this number,” the newest bankruptcy records said. 

Bankruptcy records filed Thursday night also said, “Ford’s last audit of the debtors was done in June of 2018. According to Ford’s audit, the Debtors received not only a clean bill of health, but were commended on the performance the Debtors were experiencing at the dealerships.”

Another audit was conducted in July according to bankruptcy documents.  That was the audit that led to Ford’s lawsuit. 

In the bankruptcy case, Reagor Dykes asked permission to pay employees and use cash on hand for other immediate day-to-day expenses like paying rent, utilities, taxes and so forth.  

The request for permission to pay employees mentioned more than 300 employees across several Reagor Dykes companies. 

Reagor Dykes claims in court records to have cash money available to pay employees with money left over if the bankruptcy judge will permit it.  

If permission is not granted then Reagor Dykes, “will have no alternative but to close their doors, discontinue their operations and liquidate their assets.”

An emergency hearing on Reagor Dykes’ request was scheduled for Friday at 2:00 pm in the bankruptcy courtroom.  

Messages have been left for Reagor Dyke’s attorney.  An update will be provided if the attorney chooses to comment.

Related Story: Reagor Dykes bankruptcy: What it may mean for customers 

Update: On Friday morning, the federal district court judge seemed to agree that Ford’s lawsuit should be put on hold.  However, the judge indicated it might not be that simple. Some Reagor Dykes companies filed for bankruptcy. But not all of them. 

The judge wrote, “The Court notes that Defendants Reagor-Dykes II, L.L.C., Reagor-Dykes Auto Mall I, L.L.C., Reagor-Dykes III, L.L.C., Bart Reagor, and Rick Dykes are not included in the Suggestion of Bankruptcy and do not appear to have filed any bankruptcy petitions in the United States Bankruptcy Court.”

The judge wants to hear from both Reagor Dykes and Ford Motor Credit Company on Monday.