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DJM - Statement of Affairs released


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25 minutes ago, David Stannard said:

 

This is the biggest problem with the community, there is ample assumptions, speculation and accusations, yet does anyone have solid proof as to what the numbers were for those that committed funds towards these projects. For example I look at the APT and think of the limited appeal that that model would have, how many people out there would race out and lay a massive amount of funds on a train that only ever ran as a prototype for a short period of time, yes there would be some that would have interest in a niche model but for most people who model BR Blue Era it would be seen as irrelevant.

 

Well, we were assured by Dave's supporters that demand was there, the project was fine and everyone should trust and not question. 

 

In the case of the Class 92 , there should be enough demand in each scale to support a RTR model - given that Accurascale believe they can make one in OO as a viable project , and so do RevolutioN in N. The latter have closed their order book.  I recall a figure of a production run of 1500 for a crowd-funded model (not necessarily a 92) being quoted by someone close to a crowd-funding project. A figure of a minimum run of 3000 models has been mentioned for the major manufacturers - on what basis I don't know

 

Dave had indicated that he needed 400 Expressions of Interest for the N gauge APT (and he had 113) ; and that he needed 1000 Expressions of Interest for the 63xx - and had 236...

 

It seems reasonable to assume similar targets for the OO APT and the OO and N 92, given we are talking about the same guy  . Those seem to be low targets for the industry. And if other people can get those sorts of numbers - or greater - for a Class 92, then Dave - (who was first in the field) ought to have been able to do so.

 

If he couldn't - then clearly there was an issue of confidence. And if he didn't reach his targets - then he shouldn't have declared the projects were on, and started spending the money

 

I agree that the APT-P looked like the acme of unrealistic wish-listing  , but enough people believe it is "iconic" to start a thread demanding someone pick up DJM's project We want an APT!  . I did suggest that Eurostars might be a better proposition than something that never went into revenue service and ran trials for a few months on one section of route , but I was shot down in flames as Eurostars are not iconic , did not work over more than a few miles of the network, and in any case nobody wants models of trains they have seen or travelled on, so a RTR Eurostar would not be viable ... On this basis , Hornby's 2020 announcements should be led by a RTR model of the Decapod - it's "iconic" , never went into revenue service, never ran except trials over a short section of one line, and no-one's ever seen one. It would also be a great deal cheaper to tool and easier to fit on the layout than an APT-P (Bachmann could retaliate  with the Paget 2-6-2)

 

But I agree on one point - the key missing numbers are "how many people paid up for each of these"? How many folk have been burnt? Should any of these projects have proceeded?

 

Hence it is very important that all those who crowd-funded should contact the liquidators . Because it doesn't look like Dave himself handed over a list

Edited by Ravenser
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14 minutes ago, Ravenser said:

I agree that the APT-P looked like the acme of unrealistic wish-listing  , but enough people believe it is "iconic" to start a thread demanding someone pick up DJM's project . I did suggest that Eurostars might be a better proposition than something that never went into revenue service

Actually APT-P did go into revenue service, albeit not for a long time. I did London to Preston on it nearly 35 years ago.

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22 minutes ago, Ravenser said:

Dave had indicated that he needed 400 Expressions of Interest for the N gauge APT (and he had 113) ; and that he needed 1000 Expressions of Interest for the 63xx - and had 236...

 

But I agree on one point - the key missing numbers are "how many people paid up for each of these"?

 

And here lies the question which makes the sums almost impossible to accurately calculate.

When it comes to Expressions of interest I work on the "aghan" rule if they were saying there was 50 Taliban then divide that number by 5! Lots of people can be interested but how many that translates to if completely different especially when you consider how much the APT was advertised at!

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Usually I enjoy reading the countless pages of words on DJM. But you'll forgive me, I am over it - I think everyone is clear now Dave Jones paid himself a salary out of DJM (and thus crowdfunded money). So I have to ask, in these 12 pages has anyone pointed something so blindingly obvious? 

 

"Does the lack of money in the DJM accounts, highlight one simple thing? Apart from a couple dozen (if that) RMWeb loyalists who parted with their cash, that is it. No one else, outside of the DJM thread ever game him a penny?" Seems rather plausible to me! 

 

I read this at lunch today, several million lost over similar behaviour to DJM: 

 

https://www.theguardian.com/business/2019/jun/26/how-gavin-woodhouse-raised-millions-for-a-string-of-stalled-projects

 

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33 minutes ago, Ravenser said:

Hence it is very important that all those who crowd-funded should contact the liquidators . Because it doesn't look like Dave himself handed over a list

 

Unfortunately when it comes down to it the people who committed funds via crowdfunding could quite easily find themselves in the unsecured creditors bucket, I for one am not a big fan of the concept as things can and do go belly up and there is limited recourse to get the funds back. That said I won't deride the concept as there are other manufacturers that do a good job of using this style of funding to finance projects and they do so in an efficient manner that delivers the goods. I am rather pragmatic in that I prefer to wait until a manufacturer brings out a rtr model rather than place deposits on a proposed model, yes I may have to wait god knows how long but at least I know I can physically get it.

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Just now, David Stannard said:

 

Unfortunately when it comes down to it the people who committed funds via crowdfunding could quite easily find themselves in the unsecured creditors bucket, 

 

Not "could quite easily find themselves" but "will - and have".

 

However an email costs nothing, and it is now of real value to the hobby at large to find out whether the crowd-funding for these models amounted to 25 people or 2500 people. 

 

The way to do that is for crowd-funders to notify the liquidators - so that the liquidators compile as full a list of the crowd-funding lost as possible. That way everyone stands some chance of finding out something about what happened here - and just how much money was swallowed by this particular black hole

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11 minutes ago, Ravenser said:

 

Not "could quite easily find themselves" but "will - and have".

 

However an email costs nothing, and it is now of real value to the hobby at large to find out whether the crowd-funding for these models amounted to 25 people or 2500 people. 

 

The way to do that is for crowd-funders to notify the liquidators - so that the liquidators compile as full a list of the crowd-funding lost as possible. That way everyone stands some chance of finding out something about what happened here - and just how much money was swallowed by this particular black hole

And that needs to include people who have already been fortunate enough to have received credit card refunds although obviously they should make it clear that they have been refunded already. (Plus anyone involved note if more than one model = more than one sum of money, was paid).. 

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3 hours ago, truffy said:

That’s just standard warning text though. Like ‘the value of your investment...’ and ‘past performance...’ etc

 

It may be standard warning text, but its there for a reason, these are risky investments. The main point of my earlier post is, they have not paid a deposit for a model that exists , or a deposit to a retailer for a soon to be released model. Which the average buyer is used to

 

They are funding (with others) the design and production of an item which is dependant upon various factors. Firstly sufficient funds being raised to design and produce a model, secondly the fundraiser being able to design the item, finally being able to get it produced. There are at least 3 major risk elements at work (raising sufficient funds, designing & manufacture). If any part fails then the project fails

 

If this were an investment being sold by a bank or adviser it would be ranked as high risk for a sophisticated investor. Reading great chunks of this thread I get the impression many just thought they were paying deposits for models to be produced in the future, nothing wrong with this assumption, especially where we have seen recently many companies spring up and successfully produce models. Sadly they are totally unaware in the many pitfalls in the design and production process that this type of product production can incur. 

 

As I said taking a punt with a small amount of money is one thing, when the buying public are being enticed in to be speculative investors and being asked to lay out quite large sums without any guarantees or protection is quite worrying. If professionals like the Funding Circle can get it wrong, its not the right place for the general public.  I do feel very sorry for all involved as clearly they were very unaware exactly what they were getting into, and hope something can be rescued from this mess for as many as possible

 

 

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1 hour ago, hayfield said:

 

 

 

If this were an investment being sold by a bank or adviser it would be ranked as high risk for a sophisticated investor. Reading great chunks of this thread I get the impression many just thought they were paying deposits for models to be produced in the future, nothing wrong with this assumption, especially where we have seen recently many companies spring up and successfully produce models. Sadly they are totally unaware in the many pitfalls in the design and production process that this type of product production can incur. 

 

Then people really should have looked into what they were doing. A fool and his money...

People who enter into 'crowd funding' who do not know what they are risking are lazy. It took me 15 seconds to find this from the first result in a google search:

 

"Basics of Crowdfunding

In most jurisdictions, restrictions apply to who can fund a new business and how much they are allowed to contribute. Similar to the restrictions on hedge fundinvesting, these regulations are supposed to protect unsophisticated or non-wealthy investors from putting too much of their savings at risk. Because so many new businesses fail, their investors face a high risk of losing their principal."

 

 

 

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4 minutes ago, Vistisen said:

Then people really should have looked into what they were doing. A fool and his money...

People who enter into 'crowd funding' who do not know what they are risking are lazy. It took med 15 seconds to find this from the first result in a google search:

 

"Basics of Crowdfunding

In most jurisdictions, restrictions apply to who can fund a new business and how much they are allowed to contribute. Similar to the restrictions on hedge fundinvesting, these regulations are supposed to protect unsophisticated or non-wealthy investors from putting too much of their savings at risk. Because so many new businesses fail, their investors face a high risk of losing their principal."

 

 

 

 

 

Very easy to say this especially with hindsight, as I said there have been many new entries into the RTR market, which in itself can give the impression that this market is easy to work in. Then we can also relate to the many successful crowdfunding schemes which raise money for good causes, both of which can give a false sense of security  to something which is quite complicated. In this instance we are not talking about folk putting their life savings into it, but amounts which are more than most would wager on a bet. A bit harsh saying both foolish and lazy. Many fall prey to forms of misleading advertising or those offering services in many walks of life.

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Depends how this pans out for the purchasers - if all who paid by credit card get their money back via section 75 then essentially it has proven the nothing ventured nothing gained principle and people will be happy to pursue a similar line in future safe in the knowledge if it all goes wrong they get back their money.

 

Whether Section 75 actually applies in this scenario hasn't been tested by the banks, they appear to be just refunding at the moment.  This could be because the claim amounts are small and it's a model railway manufacturer who sold direct who has gone bust.  But if the amounts were larger and if they investigated deeper as to the nature of the business they may decide that the investment nature of the transaction breaks the Debtor - Creditor - Supplier chain which then then might result in the banks asking the cardholders to prove section 75 applies in court.

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6 hours ago, letterspider said:

I have nothing to say

 

6 hours ago, letterspider said:

You should be able to get money back from Paypal due to item not received if within the deadline?

 

Can I suggest longer intervals at least may be prudent. 

 

Your second statement does say nothing which hasnt been said a long time since. 

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4 hours ago, Ravenser said:

 

 

 On this basis , Hornby's 2020 announcements should be led by a RTR model of the Decapod - it's "iconic" , never went into revenue service, never ran except trials over a short section of one line, and no-one's ever seen one. It would also be a great deal cheaper to tool and easier to fit on the layout than an APT-P (Bachmann could retaliate  with the Paget 2-6-2)

 

You could say the same about the GWR "Holden" 101 0-4-0T. Probably sold more than any other RTR model of the last 40 years. It never left Swindon.

 

But I would say that there is demand for a Decapod. Why did SEF make one of there wasn't?

 

http://www.sefinecast.co.uk/Locomotives/New and Revised Loco Kits Page 6.htm

 

It wasn't the choice of prototypes that did for DJM, but the implication of the projects.

 

 

 

Jason

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9 minutes ago, Claude_Dreyfus said:

3- Ignore the fan-boys, cheerleaders and the 'at least they are trying' or 'if you have nothing nice to say, say nothing' brigade. There have been too many people who have been shot down for expressing genuine, and ultimately prescient, reservations about this manufacturer. Remember, they are not putting their money where their mouth is, they're putting your money where their mouth is.

 

Easy to say with the benefit of hindsight. There were, and are, plenty of people ready to rubbish anything new, not on the basis of facts, but prejudice.  The whole DJM thing is incredibly tribal and always had been. If we are to always assume that those against something are right, then nothing new will ever happen. 

 

To use a bigger example, the London Olympics were widely pilloried until 2 weeks before they took place. Watch HIGNFY repeats from the time on Dave and you'll see commentators predicting the games would be a complete disaster. Should we have cancelled? Hindsight says no, but at the time, plenty were against holding them.

 

As far as the fanbois go, how do you know they aren't putting their money where their mouth is? Many will have done exactly that, and then be talking up the project so they don't look stupid for putting their cash down.

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11 minutes ago, Phil Parker said:

 

Easy to say with the benefit of hindsight. There were, and are, plenty of people ready to rubbish anything new, not on the basis of facts, but prejudice.  The whole DJM thing is incredibly tribal and always had been. If we are to always assume that those against something are right, then nothing new will ever happen. 

 

To use a bigger example, the London Olympics were widely pilloried until 2 weeks before they took place. Watch HIGNFY repeats from the time on Dave and you'll see commentators predicting the games would be a complete disaster. Should we have cancelled? Hindsight says no, but at the time, plenty were against holding them.

 

As far as the fanbois go, how do you know they aren't putting their money where their mouth is? Many will have done exactly that, and then be talking up the project so they don't look stupid for putting their cash down.

 

More a lessons learned for me, so yes, very much in hindsight.

 

The last point, I have amended my post for clarity... You're right, more often than not the defenders have invested themselves. My point was that even perfectly reasonable queries were being shouted down. 

 

Those attacking just for the sake of it, especially without providing evidence, or some constructive ways of resolving the situation, do get challenged...and there are enough who are circumspect enough to identify when a genuine concern is being shouted down and when someone is just being a PITA.

 

Just to add, this hasn't put me off crowd funding...I have one other on order, and if/when funds allow potentially one of from another manufacturer/sponsor.

 

Edited by Claude_Dreyfus
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If anything positive is going to emerge from this mess it needs a small group of the RMWeb community to get together and represent the whole. And by a small group I mean a few people with sufficient knowledge - and emotional detachment - to engage with those responsible for winding up DJModels. I am not confident that there is a positive outcome for those who have lost out - businesses fail all the time, in my view the crowdfunding risks were clear and, more generally, in the grand scheme of things, this is a small business failure. But endless speculation, however well informed, tossed out into the ether, isn't going to achieve anything. A more focussed effort might, at the very least, provide clarity on the outcome that is achievable, or even influence that outcome.

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3 minutes ago, Steamport Southport said:

 

You could say the same about the GWR "Holden" 101 0-4-0T. Probably sold more than any other RTR model of the last 40 years. It never left Swindon.

 

But I would say that there is demand for a Decapod. Why did SEF make one of there wasn't?

 

http://www.sefinecast.co.uk/Locomotives/New and Revised Loco Kits Page 6.htm

 

 

 

Jason

 

I think there is a demand for a Decapod. SEF report it's one of their better selling kits. As is the "Hush-Hush" . They are "iconic" and people do disproportionately buy odd-balls. The average modeller's fleet tends to be based on one of everything . BRs fleet was based on about 800 Black 5s, 800 8Fs , 900 WDs , 500 Class 47s, 600 RODs, 300 x 37s, 900 x 08.... Heljan have done rather well out of "I'll have 1 of everything" by doing prototype diesels

 

Smokey Joe has probably sold as many as the Holden 101

 

I just don't think  Decapod is viable as OO RTR - and nobody else seems to either. Even though far more people model steam than electric and a thumping great tank engine would be much cheaper to make than an APT - it would retail at half or a third of the price of an APT.  I couldn't fit a 7 car APT on my layout , but I could fit Decapod. It might look a bit foolish on a 2 coach train but not so much worse than the Bachmann 10001 which I do own ("Works running-in turn, dear boy")

 

I think the DJM APT will stand as the high-water mark of OO RTR extravagance and frothing, and I struggle to believe the numbers would really have added up

 

It's just I don't expect to see anyone announcing a RTR Decapod - or a Met 2-6-4T for that matter - ever.  And nor does anyone else. Nor do I see the argument that Class 370 is a dramatically better commercial proposition than Class 373. Both are stretching it - I'd argue Class 370 stretches it a lot more

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1 hour ago, woodenhead said:

Depends how this pans out for the purchasers - if all who paid by credit card get their money back via section 75 then essentially it has proven the nothing ventured nothing gained principle and people will be happy to pursue a similar line in future safe in the knowledge if it all goes wrong they get back their money.

 

Whether Section 75 actually applies in this scenario hasn't been tested by the banks, they appear to be just refunding at the moment.  This could be because the claim amounts are small and it's a model railway manufacturer who sold direct who has gone bust.  But if the amounts were larger and if they investigated deeper as to the nature of the business they may decide that the investment nature of the transaction breaks the Debtor - Creditor - Supplier chain which then then might result in the banks asking the cardholders to prove section 75 applies in court.

As a matter of interest, I was chatting to my bank manager the other day and this business of crowdfunders being reimbursed via section 75 came up.  It was her opinion that section 75 did not apply to crowdfunding, so banks may well start to resist refunds in future.

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4 minutes ago, eastglosmog said:

As a matter of interest, I was chatting to my bank manager the other day and this business of crowdfunders being reimbursed via section 75 came up.  It was her opinion that section 75 did not apply to crowdfunding, so banks may well start to resist refunds in future.

Very much how I see the situation.

There were adequate warnings about what people were signing up for. 

The first post on the APT thread sells it out.

My gripe is that banks and credit card companies making refunds is indirectly increasing the charges that I have to pay for their services.

Being a person who has stated their position regarding crowdfunding in all it's forms I am not happy that I currently have to subsidise those people who have paid money into such schemes.

I do feel that our "Mate" is getting a bit of unjustified stick from some quarters.

His initial aim was to produce the J94 as far as I remember things.

The profit from this model would finance the next model.

That sounded to me like a sensible business plan.

It all seemed to go wrong when he started the crowdfunding model.

Now just what was behind that idea?

Pressure from punters?

I don't think that his previous history flags him up as a master con man. I think he just got out of his depth and could not cope.

We just do not know and until, if ever, we do then speculation as I see it is rather pointless.

Bernard

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45 minutes ago, Ravenser said:

 

I think there is a demand for a Decapod. SEF report it's one of their better selling kits. ..people do disproportionately buy odd-balls.

 

Dead right IMHO.

 

It was even less useful than a Fell and didn't look the same 3 days in a row.

 

But it would sell.

 

And I'd buy one. 

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