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DJM - Statement of Affairs released

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8 hours ago, chris p bacon said:

It's likely that FC had asked for personal guarantees (usually a property) for their lending.

 

Funding Circle advertise their peer-to-peer lending as unsecured and subject to "rigorous assessment". 

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Posted (edited)

The cost of credit is variable, it is easy to forget that money/credit has a cost. And perhaps the most important of those variables is risk. Once companies get into difficulties there is a period when credit is still available but it comes with a lot more strings and cost. Even Hornby ended up going to a lender of last resort a few months ago. Then things reach a point where it dries up and businesses go under. At that point it is common for companies to try and blame banks or lenders for not giving them more money but the sad truth is that companies have gotten themselves into a position where nobody with sense would lend them anything more and there is nothing to offer as security in the case of secured credit. In the case of DJM the company had already been funded to a degree by modellers providing interest free and free credit via crowdfunding. 

Edited by jjb1970
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1 hour ago, GWR-fan said:

 

I believe with the modified Hall it was more a mix up of tooling in the manufacturing rather than a CAD fault.  Perhaps down to the selecting of the right tooling and not being familiar with the prototype.

 

(Off thread)

That implies there’s a correct set of tools for a modified Hall. I find it hard to believe that Bachmann/Kader would not have released the correct tooling model subsequently. In the past they have run revised bodies for incorrect liveries.

(back on thread)

 

 

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Posted (edited)
16 hours ago, Yellowperil said:

However, such skills would be most useful when reviewing their drawings, artwork and EPs, to make sure there aren’t any “boo boos”.

That's a good point - like making sure things are scaled correctly, like making sure the proposed arrangement of the mechanism will be fit for purpose (the Chinese factories seem very keen on geared drive for steam outline models), and making sure that details are correct and the correct size such round pipes being moulded round or that things like apertures for numberplates haven't appeared )although that seems not to be something they include in CADs from what I've seen).   So it does indeed need some skills and knowledge of what is being modelled - otherwise you finish up with a GWR outline 'King' with equipment on the tender which is there to allow one to run on today's network.

 

Hmm, I really can't think of any examples :rolleyes:

 

As far as the CADs are concerned let's not run away with some misimpressions.  Fact - some of the CADs I listed are with a factory where some sort of dispute existed between it and DJM.  We don't know how that dispute can be resolved but unless it is resolved those CADs remain unrealisable assets unless, possibly the factory are able to 'sell' access to them .  Fact - we don't know what the situation is in respect of the other CADs, particularly the crowdfunded ones,   and we don't know if there is any dispute in respect of those.  

 

In my view with a bit of work with the factory the CADs for the N gauge 'King' can be turned into something suitable for production and therefore those CADs are a realisable asset if they are unencumbered.   But it might suit some purpose to imply they have no realisable value.  The only way to find out is to approach the liquidator and ask which CADs are known to be realisable and make an offer for them - and that is the only way to establish their actual value (which won't be anywhere near £30K).

Edited by The Stationmaster
correct minor typo
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Surely one word sums it up Sad

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This has developed into a fascinating saga which is becoming the best read on any of these fora in a long time.  My own involvement with DJ is limited to attempting to buy a Clayton and I have no losses myself, but one point that strikes me as not covered is the role of the Chinese.  It does seem strange that DJ took a two week trip to China at such a crucial point for his business, unless it was not a 'jolly' as some have implied but actually a last ditch attempt to stop the Chinese pulling the plug - the factory may perhaps have demanded  his presence for face to face talks. No doubt they retain a solicitor here, whom they could easily have then instructed to take the necessary steps.  Any tooling that was completed is no doubt already marked for recycling.

 

Crowd funding takes different forms as explained on the Financial Conduct Authority website but in DJ's case it would probably count as 'pre-payment crowdfunding' which is not regulated.  However, if DJ implied that funders were making an 'investment' then the situation would be different.  

 

Put me down for a copy of the book when Warner publish it.  No doubt it will sell more copies than any of DJ's models ever did.

 

 

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31 minutes ago, wasabi said:

It does seem strange that DJ took a two week trip to China at such a crucial point for his business, unless it was not a 'jolly' as some have implied but actually a last ditch attempt to stop the Chinese pulling the plug - the factory may perhaps have demanded  his presence for face to face talks. 

 

 

I remain unconvinced that he visited China in May.

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2 hours ago, Yellowperil said:

Also entries in diesel and wagon categories but nothing populated yet, have they bought all the DJM IP?

Won't do them much good if they have!  

 

But, as I said elsewhere as a creditor they might havea bit of leverage when it comes to aaquiring assets (especially assets which were marked down as having no cash value for the liquidator) and they maybe have the wherewithal to clear any disputes with the factory(Ies?) in China"   On the other hand it might just be a bit of a joke or a spot of daydraeaming - only time will tell but if it keeps the punters looking at their website it's wider implications are totally irrelevant, they're getting the clicks ;)

 

But it still looks bit odd that the CADs were marked down as having no realisable value for the liquidators (assuming DJM actually had unencumbered title to them of course?).  If they're shown as worthless it might be useful for somebody when it comes to giving the creditors 'something'

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The clayton would need a total redesign and the tooling for the shark wasnt past block stage so i hear

 

https://www.ngaugeforum.co.uk/SMFN/index.php?topic=45680.msg575788#msg575788

 

not a lot left in the pot... someone might buy up the mermaid tools but again they sit too high etc and 2mm wheel sets raise it even more.... as for the 92 not sure that anyone would want to reproduce another verison, that would be commercial suicide?

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The fact Hattons sold all of their mermaids might mean that the height issue isn’t a problem for joe average modeller. The alternative is a crude white metal lump, the rtr version will look 1000 times better. I have 6 and I’m very happy with them.

 

i don’t think there are any obvious conclusions at this point, if it’s a joke it’s a very odd one.

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Posted (edited)
3 hours ago, wasabi said:

...  Any tooling that was completed is no doubt already marked for recycling ...

 

With my ex-toolmaker and ex-moulding shop manager's hats on, I struggle to believe that would make any sense at all to the Chinese.  My money would be on them simply writing the cost off, sitting on them until the dust has well and truly settled, doing enough by way of a tweak or two to establish a good case for them being new tooling of their own devising, and then seeing who'd be interested in a run if the price was right.

Edited by spikey
the inevitable typo
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16 hours ago, DavidH said:

 

Interesting. As far as I originally interpreted it, it's the initial statement as provided by and signed off by DJM.

 

The pdf on companies house says clearly it is the director's statement, and Andy York clarified it as well. It's dated 30 May (see below); the company voted to wind up on 4 June; the liquidator was confirmed on 4 June (these other two dates are all on companies house); the liquidator's signature on this document is then 5 June. Are you saying that the liquidator did all the bold stuff in your posting before their (official) appointment and then signed it off as the director's statement?

 

 

https://www.rmweb.co.uk/community/uploads/monthly_2019_06/image.png.55a5b03a4a3563fcd11d7f28d6a5748e.png

 

Hi, I was certainly not suggesting those matters went to full investigation, however, this is a legal document and persons familiar with the law will have, before signing, looked at the presented evidence to gauge it's possible relationship to reality. {Much as a police officer would look at what is being presented by a complainant, to gauge it's likely voracity - "Are you sure that 3 Fairies jumped in front of the car, sir??"}  An MD arriving with a Statement of Affairs and the Company Book, with relevant communication copies, is likely to spend less time being interviewed, before being signed-off.  One turning up with a Statement and otherwise empty hands, would be there for quite a while longer, before signing off.  Nobody involved in investigations of any variety want to be stood in front of the Beak, to be asked why they started a, long, expensive investigation on the basis of 3 Fairies jumping out in front of a car - Duhh!! Everyone knows that Fairies are far too nice to behave like that.}  The detailed checking to obtain "evidence" {the Fairies} for any claimant would clearly be concluded dependant on whatever the Insolvency company considered necessary.

 

I apologise if I gave the slightest impression that a Liquidator would have made detailed investigations, rather than questions which would establish the probable "evidential" worth of what the MD was trying to state.  

 

Regards

 

Julian

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6 minutes ago, spikey said:

 

With my ex-toolmaker and ex-moulding shop manager's hats on, I struggle to believe that would make any sense at all to the Chinese.  My money would be on them simply writing the cost off, sitting on them until the dust has well and truly settled, doing enough by way of a tweak or two to establish a good case for them being new tooling of their own devising, and then seeing who'd be interested in a run if the price was right.

Thinking of the existing DJM loco tooling that is exactly what they have already tried in respect of the J94 and Class 71 but reportedly they could find no takers in the UK.  However with DJM out of the way as a company the situation is slightly different but it all depends whether or not anybody thinks there is actually any sort of commercial justification for a re-run of either or both.   Especially so with a slightly predatory Hornby having both models in its repertoire and seemingly no compunction nowadays about launching spoilers*/taking advantage of 'increased interest in the marketplace'* (chose your own interpretation of which * it would be ;) ).  

 

Seemingly the only other DJM tooling  in existence is the N gauge Mermaid and anybody would no doubt ask the same question - is there a market for more of them?

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Posted (edited)
4 hours ago, Yellowperil said:

 

Going to the 'manufacturer' categories pages appears to list the Class 92's and an N gauge king, but there are more that don't appear in the listings, if you Google "hattons dreamlist". This, for example:

 

https://www.hattons.co.uk/85284/hattons_dreamlist_oj94_004_class_j94_austerity_0_6_0st_8023_in_lner_black_with_original_bunker/stockdetail.aspx

 

as well as non-DJM items, like

 

https://www.hattons.co.uk/446689/hattons_dreamlist_h4_teakck_wish_lner_gresley_teak_corridor_composite_not_yet_made_add_to_your_wishlist_and_we_w/stockdetail.aspx

 

and

 

https://www.hattons.co.uk/446731/Hattons_Dreamlist_H4_89_Wish_Class_89_Not_yet_made_add_to_your_wishlist_and_we_will_inform_you_if_this_model/StockDetail.aspx

 

I would surmise that these are more "wishlist" items, not actual items in production, and the DJM items have just been moved there for archiving, rather than outright deletion.

Edited by Dragonfly
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Posted (edited)
34 minutes ago, The Stationmaster said:

Thinking of the existing DJM loco tooling that is exactly what they have already tried in respect of the J94 and Class 71 but reportedly they could find no takers in the UK.  However with DJM out of the way as a company the situation is slightly different but it all depends whether or not anybody thinks there is actually any sort of commercial justification for a re-run of either or both.   Especially so with a slightly predatory Hornby having both models in its repertoire and seemingly no compunction nowadays about launching spoilers*/taking advantage of 'increased interest in the marketplace'* (chose your own interpretation of which * it would be ;) ).  

 

Seemingly the only other DJM tooling  in existence is the N gauge Mermaid and anybody would no doubt ask the same question - is there a market for more of them?

 

The 71 is just too niche and will never find a taker when another, arguably more practical, model exists from Hornby.

 

(As an aside, DJM ought to have done ok out of the 71 - it was crowd-funded, and the crowd-funders got their models. He should therefore have been able to meet the costs from the factory. Similarly the J94 really should have paid its tooling costs. It's a little unclear why and how a  financial dispute arose with the factory over these.)

 

The J94 might have a future if someone is prepared to invest in a new mechanism for it. They were and are a common class, and the Hornby model is dated

 

Then there is the 14xx, where the exact ownership of the project - and it's tooling - isn't quite clear to me. Was it an exclusive commission from DJM by Hattons - meaning that DJM owned the model (as when you commission something from Bachmann) . Or was Dave Jones simply acting as a consultant (as seems to have been the case with the D600).

 

The 14xx is a common, bread-and-butter class. A Chinese factory holds the tooling and was in dispute with DJM. Hattons commissioned it, and sold it - and now have a relationship with one or more Chinese factories for making OO RTR. Again a revised chassis is needed. Perhaps the most interesting question is whether the 14xx will resurface in a few years time - and where

 

As for the Hattons listing - it may be that there are associated costs/funds associated with these items and simply deleting them off the system is not a good idea. So they have been retitled and dropped into a "dump" category. The other item under Hattons Dreamlist is a single listing for a OO King - a dead project, but possibly a convenient "dummy entry" to which all financial data from the failed project can be attributed

Edited by Ravenser
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2 hours ago, Yellowperil said:

The fact Hattons sold all of their mermaids might mean that the height issue isn’t a problem for joe average modeller. The alternative is a crude white metal lump, the rtr version will look 1000 times better. I have 6 and I’m very happy with them.

Hi

 

There is a third alternative but you have to be a member of the 2mm SA to obtain the ex Stephen Harris kit. I have built six with another six in the stash all with N gauge wheelsets.

 

Cheers

 

Paul

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16 minutes ago, PaulCheffus said:

Hi

 

There is a third alternative but you have to be a member of the 2mm SA to obtain the ex Stephen Harris kit. I have built six with another six in the stash all with N gauge wheelsets.

 

Cheers

 

Paul

Cheers Paul, thought there might be a 2mm kit but couldn’t remember.

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I think there are all sorts of possibilities for the CAD files and any tooling which exist, ranging from being dead right through to being picked up by another company. If the position with respect to ownership can be resolved with the Chinese factories then they will have a value to somebody and if the price is right could be very attractive. I'm guessing the Chinese factories only want to recover what is owed to them (I have seen no credible evidence that the factories have done anything wrong in any of this despite efforts to throw mud their way by DJ) and that realising something from the work they've done would be a better outcome than most of the alternatives. And they will probably already have relationships with some of the parties which might be willing to have a go should the price be right. Ultimately I guess it will all depend on getting a resolution for the dispute in China.

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It seems from the N gauge forum link that N gauge Class 17 tooling does exist, and once all the dust has settled it might one day appear through somebody. A couple of thousand pounds for the IP registration and CAD might make sense to someone in that context.

 

Otherwise most of the IP filings were invalid, the CAD is of no value in itself when tooling has been generated, and Kernow own the tooling for their commissions (and have access to it)

 

All that's left to argue about is the J94, and 14xx tooling in OO and the Mermaid and Class 17 in N. The first two would need the mechanism reworking. I went to a small show today where one of the local model shops still had two DJM J94s so I doubt that any of this is very urgent

 

What's the betting on a new state of the art J94 from Hornby being announced in Jan 2021??. Hornby can do decent mechanisms on industrials

 

More important I think , is establishing how much of the hobby's money went into the black hole labelled "DJM Crowd-funding" - and what the true legal status and terms of "crowd-funding" actually is in Britain

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Posted (edited)
30 minutes ago, Ravenser said:

More important I think , is establishing how much of the hobby's money went into the black hole labelled "DJM Crowd-funding" - and what the true legal status and terms of "crowd-funding" actually is in Britain

That, to me, is the 64 thousand dollar question - can any supplier / business opt out of  financial comeback from lack of delivery  'because crowdfunding' ? I think the legal difference between paying a deposit on a product in advance and investing in a company needs making a lot clearer.

Edited by spamcan61
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Just now, spamcan61 said:

That, to me, is the 64 thousand dollar question - can any supplier / business opt out of  financial comeback from lack of delivery  'because crowdfunding' ? I think the legal difference between paying a deposit on a product in advance and investing in a company needs making a lot clearer.

 

And if it's not legally a deposit in advance but investing - what level of information are the "investors" entitled to?? Is this subject to any kind of regulation?

 

The idea that "crowd-funding" amounts to zero-interest money, for as long as the promotor likes, with no liability if the project fails, no right to demand repayment, and no right to any financial information about the investment or the business is just a bit alarming. That would be so one-sided in favour of the promotor as to be intolerable

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19 minutes ago, Ravenser said:

 

And if it's not legally a deposit in advance but investing - what level of information are the "investors" entitled to?? Is this subject to any kind of regulation?

 

The idea that "crowd-funding" amounts to zero-interest money, for as long as the promotor likes, with no liability if the project fails, no right to demand repayment, and no right to any financial information about the investment or the business is just a bit alarming. That would be so one-sided in favour of the promotor as to be intolerable

 

Yup!  However, there is also the other main consideration...  THE BAIT!!

 

Regards

 

Julian

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I've always viewed crowdfunding requests as little more than begging. I can see the logic for a small charity in order to gain extra donations, or maybe for a desperate family to afford to send an ill child for expensive overseas surgery, but I would not expect to get anything in return except maybe for a feeling of satisfaction that I have contributed a good cause. 

 

I could never quite understand how my personal idea of the crowdfunding concept could be adapted for a profit making proposition. If someone wants a deposit up front in order to get a project up and running, then call it a deposit, but make clear the conditions of refundability or not, as the case may be.  

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On 28/06/2019 at 21:29, roythebus said:

 If I may go back to a chance with Dave Skelton of W&H Models in the early 1970s at a Toy Show, he said the problem with the UK market is that it is 1/76 scale.

 

Correct me if I'm wrong, but - didn't W&H go bust not long after that?

 

Not sure that that fact enhances the wisdom of the speaker!

 

Regards,

John Isherwood.

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5 hours ago, spamcan61 said:

That, to me, is the 64 thousand dollar question - can any supplier / business opt out of  financial comeback from lack of delivery  'because crowdfunding' ?

 

The short answer appears to be No, as crowdfunding has no legal meaning in the UK.  If the substance of the deal is that an individual is buying a product from a supplier, then normal consumer protections will apply. DJM's disclaimers to the contrary would likely have failed if they had been tested in court.  

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