DJM - Statement of Affairs released

[polybear]

6 minutes ago, Only-Me said:

 

Definition of rogue trader is in the financial markets theres probably a different name that goes with this level of ineptitude.

 

Total F**kWit?

 

The more I read about this situation, and after careful investigation of Business Law, Taxation, Paypal Contracts and T's & C's, Receivership Law etc. etc. (or maybe not) followed by an in-depth analysis I have concluded that the whole situation may be considered to be (and this is a carefully considered legal term) as a total and utter ClusterF**k.

[The Stationmaster]

2 hours ago, polybear said:

 

In fairness to DJM, unless proved otherwise, I don't think he is a "Rogue Trader" (in my book they are doing it deliberately in order to scam people).  I just think he was totally out of his depth when it came to running a business.

I think we'll have to wait and see what comes of of any further enquiries by the liquidators, and maybe others, as they gradually become aware of the wider state of the business before any full conclusions can be drawn.  And I wonder if in any case 'out of his depth' is the correct term - more like a lack of competence and application I suspect.

[melmerby]

2 hours ago, melmoth said:

 

 the incarnation of Meccano that provided us with Hornby Dublo went bust over fifty years ago..

However it was still a working business with assets, just not profitable. IIRC, Unlike DJ Models, It didn't go into administration.

It was there for revival under a different owner which was Lines Bros.

[truffy]

7 hours ago, The Stationmaster said:

And I wonder if in any case 'out of his depth' is the correct term - more like a lack of competence and application I suspect.

There comes a point where they’re pretty much the same thing in my book. 

Edited June 27, 2019 by truffy

[Oldddudders]

There has been repeated reference in this and other related threads to the possibility of illegal financial operations having occurred during the last few years. Learned, ie. qualified, members have hinted at this. While I am not a financial victim here, I am enjoying the collective "Miss Marple" sleuthing, which might support a case against DJM or DJ. 

 

We can hardly expect liquidators to wade through the treacly banter on here, but is anyone amassing data which could be of interest to them, having regard to a potential prosecution? If I had suffered loss, I think I'd be pleased to think so, and some of the numbers being quoted would seem to imply there are many such victims. 

[polybear]

7 hours ago, The Stationmaster said:

I think we'll have to wait and see what comes of of any further enquiries by the liquidators, and maybe others, as they gradually become aware of the wider state of the business before any full conclusions can be drawn.  And I wonder if in any case 'out of his depth' is the correct term - more like a lack of competence and application I suspect.

 

Agreed, hence my use of the term "...unless proved otherwise..." in my original post

Edited June 27, 2019 by polybear

[Edwardian]

I think we should be clear that there is no evidence of impropriety.  It's also been said several times that the liquidators will have zero appetite for digging below the surface. Sitting back and waiting for the liquidators to find a smoking gun (if there is one) is likely to prove a waste of time. 

 

That said, information is partial and no satisfactory account of what happened to crowd funders' money has yet emerged.  If sums were paid to a personal, rather than business account and if that was not properly dealt with, e.g. it was treated as a director's loan (for which there is not evidence as yet, I might add), then I can see how that might be one of several possible routes to personal liability for the former proprietor.  It seems to me, though, that speculation will not produce results and, indeed, seems rather unfair to the former proprietor; people are publically guessing that he might have committed some legal wrong, which, with respect to my learned friends, seems to be hinting at more than we know.

 

It is fair to balance that by not leaving stones unturned for those out of pocket. So, if any crowdfunders believe they paid money directly to the proprietor and want to see if that gives them an alternative to a claim against a profoundly insolvent company, then the first thing they should do is get together so that their combined claim is worth enough to make it cost-effective to pursue. 

 

If there are a body of crowdfunder creditors who paid the ex-proprietor rather than the company, I suggest that combined they may have some traction to press the liquidator to investigate whether their money went to the company and, if so, whether as payment or via a loan from the director. The answer might well be, no impropriety, nothing to see here, move along ... 

 

If, however, the suspicions voiced here were to appear to have some basis in fact, then it would be time to write to the former proprietor articulating a claim.

 

I say this with some reluctance, but if such a group of crowdfunders wanted a friendly eye cast over this (pro bono publico), they are welcome to PM me as this does fall within my professional expertise. 

 

I think this would be preferable to further public speculation as to what the ex-proprietor may or may not have done. The statement of affairs is incomplete and begs a number of questions.  It does not follow from this, however, that the answers to those questions, if and when they emerge, will point to any wrong-doing. At this stage, I must stress that it appears to me that there is no visible evidence that the ex-proprietor was anything other than an indifferent businessman whose store of luck eventually ran out. 

[ThaneofFife]

23 hours ago, AY Mod said:

 

Others may say the same about the level of 'rivet-counting' on some models; I note you get involved with those topics. The content in these topics serves to assist people who have lost money. If it's not of interest you know what to do.

Quote

Or I can do it for you.

 

 

 PM me please.

[Chris Higgs]

14 hours ago, njee20 said:

Did he ever actually claim to be doing the CADs? I'm sure I remember lots of comments on the 92 thread implying they were being done by others.

 

 

To my view, he always made clear that the CADs were done in China, as I believe is also the case with Dapol.

 

Based on the amount of balls he was juggling all at once, there was more than enough to do just project managing them, without doing any of the tasks himself.

 

Chris

Edited June 27, 2019 by Chris Higgs

[njee20]

But he also said he had loads of capacity for more projects, I think he actually put a number on it.

[RedgateModels]

deleted

 

Edited July 29, 2022 by RedgateModels
lost image deleted

[melmoth]

9 hours ago, melmerby said:

However it was still a working business with assets, just not profitable. IIRC, Unlike DJ Models, It didn't go into administration.

It was there for revival under a different owner which was Lines Bros.

 

Interestingly enough (to me at least) and not that far off topic, when Rosebud Kitmaster called in the receivers earlier in the 60s, the amount owed seemed to be very small when set against their assets (at least according to Let's Stick Together).

[The Stationmaster]

2 hours ago, truffy said:

There comes a point where they’re pretty much the same thing in my book. 

In my book 'lack of application' means something different - more like not getting on with even the simplest of tasks but, for example, leaving them while you go off and have a day out etc.  If I was running my own business my biggest interest - apart from trying to keep it solvent - would be in providing timely and exemplary service for my customers who are, after all, the providers of the income which helps keep the business going and growing.

 

A very different thing from not properly administering funds or failing to submit accounts on time 

[The Stationmaster]

1 hour ago, Chris Higgs said:

 

To my view, he always made clear that the CADs were done in China, as I believe is also the case with Dapol.

 

Based on the amount of balls he was juggling all at once, there was more than enough to do just project managing them, without doing any of the tasks himself.

 

Chris

Now that really is a competence issue although as already pointed out he did say that he had the capacity to take on more projects.  If we look at where he was on the various live projects in April he had four live N gauge projects and two live 00 projects (one of which was of the same class of loco as one of the N gauge projects).  Two,  probably all four,  of the N gauge were, according to his website, about to go to tooling with delivery dates on two of them.  One of the 00 gauge projects would appear to have been almost at that stage (the Class 92) while the other was still in the very early stages of CAD development.

 

The only truly time consuming work among all of that was CAD checking and I don't belittle that task one bit (I've been involved in such a task myself) but most of the others were at a relatively simple process management stage until EPs arrived for checking,  and also livery details were needed to be prepared.   Easy to deal with in a 5 day working week with perhaps a bit of weekend work if anything was slipping or urgent answers were needed by the factory; 40 hours a week should have eaten that lot with time to spare (and don't forget he in effect said he had time to spare).  

 

If a project manager can't juggle that few balls at once, including the associated financial balls, then I would agree whole heartedly with folk who say he was out of his depth or lacked competence but if that really was the case then he would probably have gone out of business long before.

[GWR-fan]

I find it odd that even as late as the end of April,  Dave,  in an APT CAD update,  was encouraging people to buy more than one APT for possible sale on eBay. At this late stage he must have known,  or at the very least,  should have known that the company could not survive and yet was still encouraging sales.   He did not wake up one morning in May, 2019 and realise that he had failed.  He must have known for a long time, perhaps back in late 2018.  When a company cannot meet its debts then I believe it to be insolvent.  A company trading insolvent is breaking the law.  Hopefully now Dave will stick to playing trains and leave the manufacturing side of the hobby to those with experience in successfully running a business.

[AY Mod]

2 hours ago, ThaneofFife said:

 

 PM me please.

 

Tell you what, it can be done the other way. 

[Colin_McLeod]

Unless Dave Jones is a rich man it is probably academic whether a crowdfunder's claim is against DJmodels or against Dave Jones personally.

 

What I find appalling is the absence of any figure in the creditors side for the value owed to the crowdfunders. By failing to include it, and thus understating the total, will significantly increase the percentage pay out expressed as "pence in the pound" . This would be to Dave's personal advantage as he has listed himself as a £50k creditor. 

 

There is a conflict of interest here relying on a statement of affairs that has been prepared by one of the creditors.  The liquidators need to do their own statement of affairs. 

 

However you describe the crowdfunders, a percentage of the value of the finished model is due to them.

 

APT high estimate: £250 × 1,000 = £250,000

 

APT low estimate; £180 × £700 = £126,000.

 

Add the figures for the 92 and the King and even at low estimates the total creditors are a multiple of the figure in the statement of affairs.

 

[pheaton]

If Dave was trading whilst insolvent the liquidators will uncover that, which is something they are legally bound to do.

 

But as had been mentioned you will need to wait for the liquidators report into the companies affairs, which hopefully will not take too long.

 

 

 

 

 

 

 

[PenrithBeacon]

It wasn't so long ago that DJ was being hailed as the best thing since sliced bread but now he's being reviled as a failure; in truth he's somewhere in between of course.

The business model he adopted had two arms:

one being essentially being an agent for others who didn't have his experience was, in retrospect, a failure because those who contracted him to act as their agent could always cut him out after they themselves acquired the experience he had (and still has),

and secondly, crowd funding those projects that others wouldn't touch. This is inherently risky from a financial point of view.

The business has failed, which is not altogether a surprise, but DJ still has marketable skills for a future employer and the hobby could well still benefit from them.

[Legend]

23 minutes ago, Colin_McLeod said:

Unless Dave Jones is a rich man it is probably academic whether a crowdfunder's claim is against DJmodels or against Dave Jones personally.

 

What I find appalling is the absence of any figure in the creditors side for the value owed to the crowdfunders. By failing to include it, and thus understating the total, will significantly increase the percentage pay out expressed as "pence in the pound" . This would be to Dave's personal advantage as he has listed himself as a £50k creditor. 

 

There is a conflict of interest here relying on a statement of affairs that has been prepared by one of the creditors.  The liquidators need to do their own statement of affairs. 

 

However you describe the crowdfunders, a percentage of the value of the finished model is due to them.

 

APT high estimate: £250 × 1,000 = £250,000

 

APT low estimate; £180 × £700 = £126,000.

 

Add the figures for the 92 and the King and even at low estimates the total creditors are a multiple of the figure in the statement of affairs.

 

 

That's what I'm thinking Colin . If the contract was with company (that is now in liquidation) then I would have expected to have seen something of these proportions in creditors .  It maybe that he thinks that these are outside the company (he signed the statement of affairs after all), in which case he should be pursued for refunds (unlikely). But I just have this horrible feeling he is "getting away with it" unless the Liquidator makes active enquiries, which really does need to include personal accounts , which may contain money that should have been the companies.

 

I haven't suffered loss but this guy has done damage to the model railway community . We need to know where that money went , just in case its sitting in a bank account somewhere in his name!

 

[woodenhead]

16 minutes ago, PenrithBeacon said:

It wasn't so long ago that DJ was being hailed as the best thing since sliced bread but now he's being reviled as a failure; in truth he's somewhere in between of course.

The business model he adopted had two arms:

one being essentially being an agent for others who didn't have his experience was, in retrospect, a failure because those who contracted him to act as their agent could always cut him out after they themselves acquired the experience he had (and still has),

and secondly, crowd funding those projects that others wouldn't touch. This is inherently risky from a financial point of view.

The business has failed, which is not altogether a surprise, but DJ still has marketable skills for a future employer and the hobby could well still benefit from them.

He has skills, he also comes with baggage - he hasn't covered himself in glory in either of his solo ventures and do we know how he left Dapol?

[Persephone]

25 minutes ago, PenrithBeacon said:

 DJ still has marketable skills for a future employer and the hobby could well still benefit from them.

 

Given the fact he's had a go at every manufacturer, whom most think hes a joke, and been dropped by every commissioner he has had, as well as dropping them in the mire, I hardly think that's likely. Reputation counts.   IMHO the hobby is better off without him or his like.

[Edwardian]

56 minutes ago, Colin_McLeod said:

Unless Dave Jones is a rich man it is probably academic whether a crowdfunder's claim is against DJmodels or against Dave Jones personally.

 

What I find appalling is the absence of any figure in the creditors side for the value owed to the crowdfunders. By failing to include it, and thus understating the total, will significantly increase the percentage pay out expressed as "pence in the pound" . This would be to Dave's personal advantage as he has listed himself as a £50k creditor. 

 

There is a conflict of interest here relying on a statement of affairs that has been prepared by one of the creditors.  The liquidators need to do their own statement of affairs. 

 

However you describe the crowdfunders, a percentage of the value of the finished model is due to them.

 

APT high estimate: £250 × 1,000 = £250,000

 

APT low estimate; £180 × £700 = £126,000.

 

Add the figures for the 92 and the King and even at low estimates the total creditors are a multiple of the figure in the statement of affairs.

 

 

Forgive me, Colin, but your first sentence says something that I don't think one can safely conclude.

 

I don't want to plunge further down what for all I know will never be more than a rabbit hole, but the former proprietor is likely to have more by way of assets than the company [EDIT: by definition as the company has no net assets], and, unlike the company, will not cease to exist and be unable to generate income in the long term.  So if there was a potential claim, claimants would likely have 6 years from the date they paid their money in which to issue that claim and 7 years post-judgment to enforce it.  That is time for money to be earned and garnished and assets acquired by a judgment debtor. True, bankruptcy could defeat that, but where a defendant has a house and the ability to earn income, it is worth him coming to an accommodation with claimants rather than imploding through bankruptcy.

 

Not saying what anyone should or shouldn't do, just saying that among the many things it's not possible to say with any degree of accuracy or certainty is whether any successful claim against the former proprietor would or would not lead to any recovery!

Edited June 27, 2019 by Edwardian

[pete_mcfarlane]

1 hour ago, The Stationmaster said:

In my book 'lack of application' means something different - more like not getting on with even the simplest of tasks but, for example, leaving them while you go off and have a day out etc. 

 

Or doing more other, more interesting, work. I've seen that, where people always had time to do interesting technical work, but were always 'too busy' to do the documentation for that work once the interesting bit was done, and they'd moved on to the next task. I imagine it's quite easy to fall into this trap if you are self-employed, as there's nobody giving you a telling off because you've not done something. .  

 

(Says the man who always fills in his corporate card claim a day or two before the deadline, because it's a bit boring.....). 

 

 

[Dr Gerbil-Fritters]

21 minutes ago, woodenhead said:

He has skills, he also comes with baggage - he hasn't covered himself in glory in either of his solo ventures and do we know how he left Dapol?

 

with a sigh of relief from the Management I imagine