Legal counsel for Reagor-Dykes Auto Group and various creditors, including Ford Motor Credit and Gulf States Toyota, were in federal bankruptcy court in Lubbock on Thursday.

Despite an objection by Ford Motor Credit, a judge approved Reagor-Dykes request to hire their own Chief Restructuring Officer. Ford Motor Credit insisted that the court reject that request on the grounds that Reagor-Dykes' management had "...exhibited an inability or unwillingness to comply with their basic fiduciary duties."

Reagor-Dykes Auto Group filed for Chapter 11 reorganizational bankruptcy on August 1, 2018, one day after an official audit report by Ford Motor Credit found evidence of extensive fraud and subsequently sued the Lubbock-based company for over $40 million dollars. In one court document, Ford Motor Credit called the situation " of the largest floor-plan-financing frauds in the history of the United States."

KAMC News reports that at the initial bankruptcy hearing on Thursday, a judge ruled that Reagor-Dykes will be allowed to hire their own Chief Restructuring Officer to advise and gather information in their bankruptcy case. However, the CRO will not be as intimately involved in the proceedings as Reagor-Dykes had initially hoped.

It's also reported that Reagor-Dykes and Ford Motor Credit were able to come to an agreement that will allow Reagor-Dykes to pay their employees through August 30, 2018, when a second bankruptcy hearing is scheduled.

It’s unclear how or if Reagor-Dykes will be able to pay rent at some of their facilities on September 1. It's also unclear if a separate Chapter 11 trustee will be appointed on behalf of Ford Motor Credit to oversee aspects of the case. Those discussions are set to resume at the next scheduled hearing.

In a press release Thursday afternoon, Reagor-Dykes said that they were "encouraged" by and "thankful" for the federal court order results.

Earlier in the week, the company issued an apology to affected customers and the community.

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