GM Financial has filed a motion urging the court to reject Reagor-Dykes’ second proposed restructuring plan because — like its predecessor — the plan fails to answer critical operational and repayment questions, according to a Nov. 26 filing with the United States Bankruptcy Court in the Northern District of Texas.
Specifically, GMF noted that the plan “puts the cart before the horse” insofar as “Plan Sponsors” haven’t been properly identified; the details of how the restructuring would be organized haven’t been hammered out; there are no viable franchise agreements on the table; and no manufacturers have committed to post-confirmation operations, according to the motion.
GMF also says that the plan is “infeasible,” as “debtors’ capital structure and earnings potential indicate that post-confirmation operations will fail,” the document noted.
Further, despite a liquidation clause in the event the restructuring plan fails, GMF contends that the clause circumvents requirements in bankruptcy code by grouping all the lenders — including Ford Motor Credit — together without consideration for how much or little each lender contributed to each dealership or specific financing arrangements.
For example, the new arrangement would require GMF to serve as a floorplan lender for all involved debtors, when in the previous, pre-bankruptcy agreement, GMF served as floorplan lender to only one dealership. By comparison, Ford Credit was a floorplan lender to six indebted dealerships in question.
Court documents did not indicate a timeline for a decision on the proposed restructuring plan.
