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DJM - Statement of Affairs released


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Can you please keep posts on topic. Off-topic content is being removed.

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6 hours ago, Talltim said:

This on the Rails website amused me

 

Capture.PNG

 

Maybe people are snapping up the remaining models expecting them to become rare (possible) and eventually highly expensive collectors items (unlikely).

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1 hour ago, Ravenser said:

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. 

I'll take a W1 and a GT3 then.

1 hour ago, Ravenser said:

The average modeller's fleet tends to be based on one of everything .

At least I have something to aspire to.

 

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2 hours 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. .....

 

I think that sometimes it's easy to overthink stuff. I tend to use the rough and ready rule of thumb, if it looks and sounds a bit spivvy then it probably is a bit spivvy. 

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1 hour 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.

 

Credit card issuers might wish it otherwise, but it seems there is no basis in UK law for them to treat crowdfunding payments differently to any other consumer transaction. No DJM refund has been refused on those grounds AFAIK.

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Yes agreed regarding oddballs.  I would not go for a Fell or a Decapod, but if DJM had listed one of the Lewin engines such as Seaham Harbour 18, I might now be on the list of his disappointed crowdfunders.

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One oddity in this is how crowd funding has become so popular...

 

Crowdfunding took a revolution during the credit crunch, it was a source of funding when banks felt the risk was too high and refused to lend.

 

so people taking a bet on a project that would be viewed by a bank as too risky, its somewhat ironic its the banks now refunding those who lost out under s75.

 

At some point Banks will influence government policy in this regard.

 

 

 

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11 hours ago, Phil Parker said:

 

 I remember those days. No end of people predicting the end of the larger firms because all these one-man-bands were more agile and thanks to lower overheads, "producing" cheaper models. They could do no wrong. All we have proved, not just with DJM, is that a larger firm is more resilient.  What Dave was trying to do is hard, if it wasn't, more people would be doing it successfully.

 

I don't think the demise of DJM tells us anything about much beyond the fact that anything can be done badly enough to end up as a wreck. Model trains are no different to businesses in many other sectors in that smaller companies can be leaner, closer to clients and react more quickly, assuming that they are well managed and good at what they do. Running a business is hard work and needs a certain degree of vision and competence, I suspect DJ had the vision but not the competence, whether or not he was willing to put in the effort needed to make a start up small business work I really can't say. If you look at the European and North American HO markets there has been a steady erosion of the position of established players by leaner new entrants. Which is not to say that an established player may be more resilient if they go through a rough patch. I suspect the business was under capitalised and that there was a serious lack of resources but a pretty important part of running a business is being able to assess just what you are capable of delivering. That is a common issue for new businesses and start-ups but it is not an insurmountable one if a company is well managed.

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19 minutes ago, adb968008 said:

At some point Banks will influence government policy in this regard.

 

 

In all fairness I think the banks and CC companies would have a strong case for arguing that crowd funding should be exempted from normal CC insurance given that such schemes are presented as coming with a degree of risk and promoted as "investments".

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It would seem that some are taking us down the garden path in that as crowdfunders we were investors in DJM projects.  From statements made it would appear that on one occasion Dave made mention of the word "invest" when talking of his projects.  Now I would lay odds of London to a brick that not one crowdfunder believed that he was "investing" in a project.  When he placed his deposit he believed that it was a part payment on a completed model.  He may have believed that there was a possibility that the project may stall,  but given the high profile enjoyed by Dave the possibility of failure seemed to be nigh impossible.  I really believe that the possibility of losing their money may have never entered their heads as uppermost was that the projects had to meet a thresh hold of participants before any project was commenced.  If the proprietor proceeded with a project without sufficient finance then I would hold him personally liable for the failure of a project.  As the initiator of a crowdfunding scheme I believe that he had a duty of care to minimise any risk.  

 

The first phase of payments was to fund the design and CAD's to then proceed to a second round of funding to finance tooling and then a third round to manufacture the project.  There was no talk of investing.  At what point in the process was there talk of possibly funding wages, lifestyle, holiday happy snaps?  To me it seems that in reality there was perhaps two businesses operating.  One was DJM with intent to propose models and the second, Davey Jones the "person" to attract crowdfunding.   Crowdfunding is only risky when the proposer has not exercised due diligence or has used the funds to finance other than the purpose the funding was intended for, possibly hoping that future funding on other projects would balance out any shortfall.  This is known as a Ponzi scheme named after an apparently "successful" New York broker who contrary to all others was offering returns far higher than any other company and had done so for many years.  In reality it was merely an illegal and highly unethical pyramid scheme benefiting those who invested earlier in the company and penalising those who invested later.   

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1 hour ago, dpgibbons said:

 

Credit card issuers might wish it otherwise, but it seems there is no basis in UK law for them to treat crowdfunding payments differently to any other consumer transaction. No DJM refund has been refused on those grounds AFAIK.

Ex gratia payments without accepting liability.

 

The spread and low value of the purchases will probably put the claims under the radar especially with DJM having gone into liquidation, the issuers probably aren't asking too many questions and taking it at face value.

 

just because you've claimed and been paid under S75 doesn't necessarily mean you have a valid claim it's just cheaper to pay out than to argue sometimes.  The actual number of claims in comparison to Chargebacks was quite low in my time, where the claims got interesting and subject to rebuttal were things like bad holidays, dodgy double glazing and building work, high value and subjective arguments.

 

Banks are pragmatic and balanced, so if you put in a claim following a liquidation they are likely to pay out unless there is some blindingly obvious flaw in your argument for a refund or the value of the transaction is high.

 

With DJM all they will see is a model train company that went bust and some people who paid deposits on orders are out of pocket, they don't know DJM's operating model or see his references now to investments and risk.

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5 hours ago, AY Mod said:

 

 

Can I suggest longer intervals at least may be prudent. 

 

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

 

Why is there a bullseye on my back for my post when two posts above this one somebody is risking libel?

Perhaps lock this thread until the liquidators have submitted their conclusions in writing

Edited by letterspider
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7 hours ago, letterspider said:

Why is there a bullseye on my back

 

I didn't stick it there, if you stand out on the horizon shouting daft things one becomes a self-made target.

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All I will say on the subject of crowdfunding is read the thread - all of it - about crowdfunding.  All (I think ) of the warnings are there, including some in respect of DJM showing more than enough red flags to put off a lot of people.  I realise the thread lies in a possibly less frequented area of the forum but if you're thinking about putting any of your hard earned into a crowdfunding scheme it might at least help you sort out the good (there are some and have been some out there), the bad (well we all know of one), and the ugly (which was part of the reason I started that thread but personally I'd be very wary of one that is around at the moment to be blunt about it).

 

I moved from being a very strong supporter of DJM to a situation where I began to have considerable - in some cases well founded - doubts particularly in respect of what in theory was an established business apparently having to rely on crowdfunding to attract capital; very different from what he'd said initially.    Some of us tried in various threads to give hints or warnings - for example poor achievement of models actually produced compared with what he said he'd produce, and so on plus crowdfunding failures.   What has happened to the company - which surprised me only by the fact that it hadn't happened earlier - has to stand as a stark warning to basically take care about where we put our money and try not to go round with eyes or wishlists that are bigger than careful study of what is supposedly being offered.  

 

Crowd funding, properly managed (e.g Revolution) can be a boon to many modellers, done badly all it does is suck money out of the hobby.

 

Here (again) is that thread -

 

https://www.rmweb.co.uk/community/index.php?/topic/133839-crowdfunding-or-minimising-risk/

 

Edited by The Stationmaster
To correct a typo
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2 hours ago, The Stationmaster said:

All I will say on the subject of crowdfunding is read the thread - all of it - about crowdfunding.  All (I think ) of the warnings are there, including some in respect of DJM showing more than enough red flags to put off a lot of people.  I realise the thread lies in a possibly less frequented area of the forum but if you're thinking about putting any of your hard earned into a crowdfunding scheme it might at least help you sort out the good (there are some and have been some out there), the bad (well we all know of one), and the ugly (which was part of the reason I started that thread but personally I'd be very wary of one that is around at the moment to be blunt about it).

 

I moved from being a very strong supporter of DJM to a situation where I began to have considerable - in some cases well founded - doubts particularly in respect of what in theory was an established business apparently having to rely on crowdfunding to attract capital; very different from what he'd said initially.    Some of us tried in various threads to give hints or warnings - for example poor achievement of models actually produced compared with what he said he'd produce, and so on plus crowdfunding failures.   What has happened to the company - which surprised me only by the fact that it hadn't happened earlier - has to stand as a stark warning to basically take care about where we put our money and try not to go round with eyes or wishlists that are bigger than careful study of what is supposedly being offered.  

 

Crowd funding, properly managed (e.g Revolution) can be a boon to many modellers, done badly all it does is suck money out of the hobby.

 

Here (again) is that thread -

 

https://www.rmweb.co.uk/community/index.php?/topic/133839-crowdfunding-or-minimising-risk/

 

 

 

The feeling I got from many of the posters is that they thought they were putting a deposit down on a forthcoming product, I wonder how many would have joined the scheme had they realised the full set of risks this type of speculative venture.

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18 hours 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.

 

But this should not reflect all crowdfunding.

Said it before, I've pledged / invested / paid money into plenty of Kickstarter crowdfunding products and had no worries about it not being delivered.  To be fair, most of mine are fairly popular ones so are very unlikely to fail.

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.

 

Talks of "Ponzi schemes" etc are ridiculous.

 

We don't know the real details, but the crowdfunding was for development  of the CADs, and they were developed to a certain point - AND have a book value.

 

Unfortunately that book value is now zero for some reason (presumably a dispute between Dave and the factory) that does not mean that the venture was not honest - merely that DJ and/or the factory were poor managers.

 

.

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4 minutes ago, phil gollin said:

.

 

Talks of "Ponzi schemes" etc are ridiculous.

 

We don't know the real details, but the crowdfunding was for development  of the CADs, and they were developed to a certain point - AND have a book value.

 

Unfortunately that book value is now zero for some reason (presumably a dispute between Dave and the factory) that does not mean that the venture was not honest - merely that DJ and/or the factory were poor managers.

 

.

Maybe the factories are not poor managers and would like the crowdfunders' money to have been used to pay their bills. We will probably never find out where the money went, or what amounts were paid to the factories and when. But the disputes with all the factories/designers suggest to me that they might have been misled somewhere along the track.

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6 minutes ago, phil gollin said:

.

 

Talks of "Ponzi schemes" etc are ridiculous.

 

We don't know the real details, but the crowdfunding was for development  of the CADs, and they were developed to a certain point - AND have a book value.

 

Unfortunately that book value is now zero for some reason (presumably a dispute between Dave and the factory) that does not mean that the venture was not honest - merely that DJ and/or the factory were poor managers.

 

.

 

 

Phil

 

Personally I am not really interested in buying RTR items, but keep an interest in what's being produced, however producing a large list of projects all at once seems to an outsider very ambitious, then asking investors to order more, in other words saying  the project needs further funding. In hind sight this is easy to see, may not be a Ponzi scheme, on the other hand were the investors being kept in the dark about about the financial position of the projects

 

I had some building work started by a builder which was keenly priced, turned out he had completely underestimated the cost of the build, thankfully I kept track of the situation and swapped builders before the situation got out of hand and cost me more, I learnt sadly a few other customers were not as fortunate and paid up front for work which was never completed. Was he dishonest, no. Just a bad business man.   

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Hi,

Interesting reading the different opinions expressed so far, I have no horse in this race. But something that may be of interest to those that do is WayBackWhen. This is a webpage that takes snapshots websites over time, and can reveal what was said in the past. A quick look at the APT page, just shows the options to buy, and does not mention crowd funding. However if you look at the bottom of the page there is a link called  'Pre-Orders'  where it does say this:

 

Pre Orders

Please Note: Any ‘pure’ crowdfunding venture is an investment with no guarantee of return, and your invested capital (All payments) are at risk. Please consider carefully whether you wish to partake in this venture before ordering.

Pre-orders at this time can require either an ‘expression of interest’ with no first payment or a first payment which will be invested in design, cad/cam, advertising, tooling etc, and as such will be spent to develop the model accordingly.

 

 

 

End of my lunch break now , but for those who have money lost and  have more time, take a look here:

 

https://web.archive.org/web/20190628114010/https://djmodels.co.uk/product/br-class-370-apt

 

Regards,

 

Neil

 

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29 minutes ago, hayfield said:

 

 

Phil

 

Personally I am not really interested in buying RTR items, but keep an interest in what's being produced, however producing a large list of projects all at once seems to an outsider very ambitious, then asking investors to order more, in other words saying  the project needs further funding. In hind sight this is easy to see, may not be a Ponzi scheme, on the other hand were the investors being kept in the dark about about the financial position of the projects

 

I had some building work started by a builder which was keenly priced, turned out he had completely underestimated the cost of the build, thankfully I kept track of the situation and swapped builders before the situation got out of hand and cost me more, I learnt sadly a few other customers were not as fortunate and paid up front for work which was never completed. Was he dishonest, no. Just a bad business man.   

 

Hayfield:

 

On the one hand - the crowd-funders received no financial information whatsoever about the projects . To be blunt , it's not clear that Dave Jones actually kept detailed records of money/crowd-funders for each project.  There does not seem to have been any separate account  or accounting for each. (For the APT he asked people to pay into his personal PayPal a/c) Nor was there any kind of prospectus /proper T &C . No costing details to support any crowd-funding were ever given. We do not know what the budgeted tooling cost was - or even how many crowd-funders were required for projects. You simply couldn't get away with this with any normal investment  or loan

 

On the other hand Dave seems to have taken the view that as it was crowd-funding those supplying the money had no consumer rights , and if the project did not succeed they were entitled to nothing. Hence - we suspect - his stance in not mentioning the crowd-funding to the liquidators in the Statement of Affairs.

 

A sum of money certainly in 5 figures, and quite possibly in 6 figures has simply evaporated - and the DJM stance seems to be that those who supplied it have no right to any information about it, and those who took it (DJ) have no liability to anyone as a result  ... (The liquidators are taking a sklightly different stance , and are taking details)

 

"Crowd-funding" is just a word - a word of quite undefined meaning. It is clear that it can mean whatever you feel you want it to mean, and I don't think it has any legal status. Some folk think the law on distance selling covers this situation. Others, like yourself, that those who paid the money over are not consumers but investors - but on what terms? And with what rights , and duties from the promoter? Under what governing regulations? No-one knows 

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2 hours ago, phil gollin said:

.

 

Talks of "Ponzi schemes" etc are ridiculous.

 

We don't know the real details, but the crowdfunding was for development  of the CADs, and they were developed to a certain point - AND have a book value.

 

Unfortunately that book value is now zero for some reason (presumably a dispute between Dave and the factory) that does not mean that the venture was not honest - merely that DJ and/or the factory were poor managers.

 

.

We don't know what the situation is regarding the CADs but the fact that their 'value' is estimated as £33,000 and the realisable amount is zero suggests to me that nobody has the necessary invoices and receipts to prove that they are unencumbered assets.

 

As I have already pointed out the total must include the J94 and Class 71 CADs (known to be involved in some sort of dispute)  leaving only from a crowdfunded viewpoint the CADs for the 'King' (which are in any case obviously a rework from originals done for the Hattons 'King'), the 2nd Class 92, and the two unfinished APT CADs.   On top of that there is presumably the CAD for the Mermaid (which it has recently been pointed out contains a serious dimensional error) and potentially two other wagons (which were not crowdfunded).   Add the whole lot together, remember that some of them are several years old, and it takes a lot of scratching to get to a cost - let alone value (depreciated or otherwise) of £33,000 for that lot.   In fact some of them are probably worthless because nothing can be done with them either because tooling already exists or they will need work to get to a usable standard.  

 

In my view the only one worth anything is the one for the N gauge'King' and possibly the (known to be inaccessible) one for the J94 to progress various improvements and variations. 

 

I'm not sure where the idea of ponzi schemes entered this debate but yet again the point is we don't know - one way or the other.  And the only way anybody will ever find out, one way or the other, is from a careful examination of bank records linked to invoices in order to correlate payments in to payments out.  If the money for each crowdfunded project was physically ring fenced (i.e held in separate accounts) and the ins & outs on that project balance through that account then there is no hint of a ponzi scheme. If the money all went through one account and payments in for a particular project don't match payments out then something is amiss.  But to be honest I doubt that whatever they might be looking for as part of their fiduciary duty the liquidators won't be looking at that as it would be a major task requiring some specialist knowledge and they are extremely unlikely to be able to realise any money out of the liquidation to cover the costs of such a task.

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1 hour ago, John M Upton said:

Hattons just deleted all listings for DJM products except anything they already have in stock.  Nothing N scale listed at all now!

 

The Mermaids for pre-order disappeared yesterday. I see that they have now sold out their remaining stock of Dutch-Livery Mermaids. Glad I bought 4 last week.

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