Case Study

Helping creditors recover their losses in one of the nation’s largest floor-plan financing frauds

Before Lubbock, Texas-based Reagor Dykes Auto Group collapsed, it was a $700 million per year business and one of the fastest-growing auto dealerships in the United States. But in 2018, Reagor Dykes was sued by Ford Motor Credit Company, which claimed that the dealership had engaged in double-flooring (receiving funding for the same vehicle twice), check kiting, and other fraudulent schemes as part of the auto industry’s largest-ever floor-plan financing fraud. The Reagor Dykes CFO and more than a dozen other employees have since pleaded guilty to federal criminal charges.

By combining top-level subject matter knowledge with an efficient use of resources to coordinate discovery across multiple cases, our team has developed a global strategic position that continues to yield optimal results.

SHJ was retained to pursue claims against several banks that were used as part of the CFO’s fraudulent schemes in order to recover funds for Reagor Dykes’ innocent creditors. Over the past three years, as special litigation counsel to the debtors and counsel to the liquidating trustee, we have filed multiple claims seeking more than $100 million on behalf of the Reagor Dykes bankruptcy estate and creditors’ trust. Those lawsuits included various fraudulent and preferential transfer claims under Sections 544, 547, and 548 of the Bankruptcy Code; equitable subordination claims; and other claims on behalf of the debtors’ estates. To date, the debtors and the creditors’ trust have obtained over $20 million of value through settlement. By combining top-level subject matter knowledge with an efficient use of resources to coordinate discovery across multiple cases, our team has developed a global strategic position that continues to yield optimal results.