The U.S. Department of Justice objected to a request by Reagor-Dykes Auto Group to hire a chief restructuring officer (CRO) on Monday.
The auto group wanted the CRO to investigate actions by the former chief financial officer, the company’s owners and anyone who worked with them after it was revealed the company owed Ford Motor Credit Company more than $114 million. The auto group said, in court filings, the CRO would take the place of the financial officer.
The Justice Department said in court filings that the CRO would have expanded powers which would permit him to independently investigate Reagor-Dykes’ prior financial transactions and their owners and officers. The documents stated those duties belong to a Chapter 11 trustee or an examiner.
Reagor-Dykes filed for Chapter 11 bankruptcy protection after Ford Motor Credit Company filed a lawsuit in U.S. District Court seeking $116 million it is owed from the auto group. The Snyder dealership was not listed in the Ford lawsuit or bankruptcy filing.
Ford Motor Credit claims the dealerships sold Ford Credit vehicles without sending required payments and submitted false or inaccurate information. The lawsuit included contracts dating back to 2008.
Ford Credit is asking the court to allow the company to take possession of vehicles and is also seeking a temporary restraining order on further vehicle sales.
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