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DJ Models: company wound-up and liquidation closed


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39 minutes ago, The Stationmaster said:

It's interesting to look at the timing of the Class 17 refunds ;)   But when was the Mermaid actually tooled - because it, like the Class 17,  was with the original factory and is now appearing under the EFE brand so neither date from the final couple of years of the company.  Not so sure about the Shark though

 

Dave seemed to be under the impression that the tooling for the Mermaids and class 17 were part of his branded portfolio of products right up the the demise of DJM and he owned (mistakenly), or at least had dibs on it. He was considering producing another batch of Mermaids in another livery (if/when he could source funding) right near the end. 

 

I doubt that the tooling date has any relevance to them now being picked up by EFE Rail for production. Neither the class 17 or the Shark were finalised for production - there was still some tweaking required and livery specification work required (the EP sample was un-painted IIRC). Presumably EFE Rail have resourced and instigated that for the class 17. Good on them. And hopefully have also made the Mermaid less leggy and reduced their buffer height.

 

I've no idea how he funded the class 17 deposit refunds for those bailing. Presumably it came out of cash income. I doubt he had ring-fenced it.

 

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1 hour ago, The Stationmaster said:

you're either a fool or a charlatan if you start a project running with fewer than sufficient customers to cover the total cost. 

 

Has the jury reached a verdict on whether the two are mutually exclusive, or go hand-in-hand, in DJ's case?

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1 hour ago, grahame said:

 

Dave seemed to be under the impression that the tooling for the Mermaids and class 17 were part of his branded portfolio of products right up the the demise of DJM and he owned (mistakenly), or at least had dibs on it. He was considering producing another batch of Mermaids in another livery (if/when he could source funding) right near the end. 

 

I doubt that the tooling date has any relevance to them now being picked up by EFE Rail for production. Neither the class 17 or the Shark were finalised for production - there was still some tweaking required and livery specification work required (the EP sample was un-painted IIRC). Presumably EFE Rail have resourced and instigated that for the class 17. Good on them. And hopefully have also made the Mermaid less leggy and reduced their buffer height.

 

I've no idea how he funded the class 17 deposit refunds for those bailing. Presumably it came out of cash income. I doubt he had ring-fenced it.

 

I wonder why he had that impression when the factory had not only stopped work on anything else they were doing for him (hence the Class 92 had to be started again with a different factory) plus they were reportedly after a large outsanding debt.  Maybe him talking about another batch of Mermaids was inspired by something like this -

 

TLM2.jpg.f0bddb5044bd965ea2de9304b919d424.jpg

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5 hours ago, The Stationmaster said:

The original factory working on various DJM projects ceased work on all of the DJM own account projects because it claimed DJM owed them a serious amount of money.

 

 

The question is how much money he had already paid them prior to the stopping of payments - it is likely that at least some, if not a reasonable amount, of money was paid to them to get them to the point where they ended up with tooling and no final payments.

 

5 hours ago, The Stationmaster said:

But if the number of people allegedly required to actually get each model project sufficiently financed was actually achieved then logically there would a be a lot more money owed to unsecured creditors.  Is it really correct that potentially only c.220 people had taken up at least three projects the cheapest of which would have consumed  at least c.£150,000 in development and production costs - that equates to c.£680 per customer for their model and they can't all have been APT deposits/stage payments.

 

 

So the conclusions - based on the numbers we do know are -

1.  There were a lot more customers paying deposits than the c.220 if all the projects had received sufficient customers to justify the cost of starting the project; we don't know how many or how much

 

My suspicion at the time was that he was proceeding on some of the projects with insufficient order numbers in the hope that as he reached various stages of the production - EP samples, decorated sample, and likely even final product - that additional customers would come on and push the project into the black.

 

 

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6 hours ago, John M Upton said:

I always got the impression that Dave thought he owned all the tooling but when he discovered he didn't, that was when this house of cards started to collapse and he began tossing teddies out of his pram.

 

Basically he was incompetent.

Wasn't that the reason behind the pre-announced announcement??

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16 hours ago, mdvle said:

 

My suspicion at the time was that he was proceeding on some of the projects with insufficient order numbers in the hope that as he reached various stages of the production - EP samples, decorated sample, and likely even final product - that additional customers would come on and push the project into the black.

 

 

 

I agree to that.  I remember when the plug was pulled on the 74 after the CADs were never seen, he was saying that the project was viable as it had the money to do the tooling.  Yeah but you still need to pay for production.

 

 

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19 hours ago, mdvle said:

 

The question is how much money he had already paid them prior to the stopping of payments - it is likely that at least some, if not a reasonable amount, of money was paid to them to get them to the point where they ended up with tooling and no final payments.

 

Don't forget that he was paying the factory for work on commissioned models as well as own label models so they were receiving some money from him.  But when there was no money being paid for commissioned jobs maybe they weren't receiving anything from him for his own jobs so they began to get a little anxious about payment and started sorting out what they hadn't been paid for?  And don't overlook the fact also that a commission customer was also apparently moving to increasingly dealing direct with the factory.  So possibly if it hadn't been the case previously it must have then become much clearer who was paying for what (and when they were paying for it).  

 

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3 hours ago, JSpencer said:

 

I agree to that.  I remember when the plug was pulled on the 74 after the CADs were never seen, he was saying that the project was viable as it had the money to do the tooling.  Yeah but you still need to pay for production.

 

 

I think some words in there need to be highlighted.  There, that should be a bit clearer now.  

 

And one pertinent question - if the projet was allegedly 'viable' why wasn't any CAD work done?  We never saw a published CAD so there was never any tangible evidence that any work leading towards production had been done done on the Class 74

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12 minutes ago, The Stationmaster said:

 So possibly if it hadn't been the case previously it must have then become much clearer who was paying for what (and when they were paying for it).  

 

You mean the kind of thing that any professional business gets sorted out right up front in the contract  ... (assuming there were written contracts)

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43 minutes ago, The Stationmaster said:

Don't forget that he was paying the factory for work on commissioned models as well as own label models so they were receiving some money from him.  But when there was no money being paid for commissioned jobs maybe they weren't receiving anything from him for his own jobs so they began to get a little anxious about payment and started sorting out what they hadn't been paid for?  And don't overlook the fact also that a commission customer was also apparently moving to increasingly dealing direct with the factory.  So possibly if it hadn't been the case previously it must have then become much clearer who was paying for what (and when they were paying for it).  

 

 

I remember well after a couple of years that Kernow was giving us the choice on some of their own projects to pay up front now or more later because the factories were suddenly insisting  upon up front payments. This started happening within a few years of things being handed over to DJM from Dapol. 

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15 minutes ago, 34theletterbetweenB&D said:

And then there is the famous Intellectual Property (IP) claim to consider, now that models indisputably originating from DJM are about to go on sale from other businesses. This is the very scenario that I would assume he was trying to prevent, but the claim of IP is nothing unless it is contested...

 

I think he may have obviously known or anticipated that the tools were/would no longer  be under his ownership and this was a final attempt to try and block their use. 

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12 minutes ago, JSpencer said:

 

I remember well after a couple of years that Kernow was giving us the choice on some of their own projects to pay up front now or more later because the factories were suddenly insisting  upon up front payments. This started happening within a few years of things being handed over to DJM from Dapol. 

 

The only (perhaps faulty) recollection I have about Kernow (which, as I didn't order anything was simply from posts on here) was Kernow asking for payments early on one occasion simply because several projects all came due at one time - and the problem with being a small producer is while you can cover the upfront costs for one project at a time if 2 or 3 all come due at once you have a problem.  And the recollection I have was this was after Kernow had left DJM and gone direct.

 

So Kernow went public and made the request, with the alternative being they would have to pick 1 project and delay the other(s).

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9 minutes ago, JSpencer said:

I think he may have obviously known or anticipated that the tools were/would no longer  be under his ownership and this was a final attempt to try and block their use. 

 

Thing is, he couldn't block their use if (as happened anyway) DJM was out of business - and any attempt to personally own them when his business went under would have seen him personally in court.

 

One possibility is that it was a last desperate chance to force the Chinese factories to try working with him by allowing another run of product (or a first run on say the Class 17) to generate revenue/cash flow for DJM - with the threat being the large amounts of metal/CAD drawings they had would be worthless otherwise.

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29 minutes ago, 34theletterbetweenB&D said:

And then there is the famous Intellectual Property (IP) claim to consider, now that models indisputably originating from DJM are about to go on sale from other businesses. This is the very scenario that I would assume he was trying to prevent, but the claim of IP is nothing unless it is contested...

The IP he registered appeared to apply to certain illustrations, that was all that came up in any check on what had been registered.  It might be possible that he thought he was registering the CADs  but even they are irrelevant when somebody else owns the tooling.  However we now know that two IPs - = CADs - were sold by the liquidator but in the case of them no tooling existed so they presumably potentially had a value because they could be used to take work done forward to tooling.

 

What is now coming from EFE is from pre-existing tooling and it was tooling to which DJM had no proven title (it wasn't recorded as an asset by the liquidators) so ownership rests with the factory who obviously can do what they like with it and, in respect of some of it, that is exactly what is now happening.

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From reading the sad and sorry end to this drawn out saga I can only conclude that “the man” had such intense and unshakable belief in his own abilities viz. that if he was only given enough time (and money of course), he’d be able to prove same to everyone. The “legend” would be vindicated, he’d show everyone.

 

Never mind the odd failures, the timelines missed, the projects pre-empted, the models which often didn’t run (unless you were lucky), all would come good in the end like a happy fairy story. Reminds me of someone else living in a big White Fairy Castle across the seas in a land far away, hoping for a happy ending. Reality suspended.

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Apart from incompetence and naivete from DJ, much of this sage reminds me of the 90s when ownership of tooling between Dapol, Mainline, Replica, etc. got so confused. It seems that working with the Chinese is difficult as they have a very different understanding from us as to how these issues should be resolved.

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5 minutes ago, BWsTrains said:

From reading the sad and sorry end to this drawn out saga I can only conclude that “the man” had such intense and unshakable belief in his own abilities viz. that if he was only given enough time (and money of course), he’d be able to prove same to everyone. The “legend” would be vindicated, he’d show everyone.

 

Never mind the odd failures, the timelines missed, the projects pre-empted, the models which often didn’t run (unless you were lucky), all would come good in the end like a happy fairy story. Reminds me of someone else living in a big White Fairy Castle across the seas in a land far away, hoping for a happy ending. Reality suspended.

Judging by what we know from real figures stated in the winding-up document money was the last thing there would seem to have been a shortage of :scratchhead:  Something in excess of a quarter of a million quid was a lot of money by any measure even if it looks like it was really meant to be progressing several different models.  If that much went 'somewhere' in the space of around a couple of years how much had gone 'somewhere' previously in the life of the company?

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1 hour ago, 34theletterbetweenB&D said:

And then there is the famous Intellectual Property (IP) claim to consider, now that models indisputably originating from DJM are about to go on sale from other businesses. This is the very scenario that I would assume he was trying to prevent, but the claim of IP is nothing unless it is contested...

When I first read about the IP announcement on his website, my initial thoughts were that it was an attempt to increase the asset value in order to stave off insolvency.

 

earlier on though if you took a squinted overview it did look like the capitol from one project was funding the milestones of another...

 

 

 

Edited by pheaton
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1 hour ago, mdvle said:

 

The only (perhaps faulty) recollection I have about Kernow (which, as I didn't order anything was simply from posts on here) was Kernow asking for payments early on one occasion simply because several projects all came due at one time - and the problem with being a small producer is while you can cover the upfront costs for one project at a time if 2 or 3 all come due at once you have a problem.  And the recollection I have was this was after Kernow had left DJM and gone direct.

 

So Kernow went public and made the request, with the alternative being they would have to pick 1 project and delay the other(s).

Yes they were required to pay before shipment and if I remember correctly to raise some cash they gave the option to pay before shipping offering a discount as an incentive.

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