DJ Models: company wound-up and liquidation closed

[Guest Half-full]

1 hour ago, Thebigshot said:

Hi Guy's 

 

i really feel sorry for the ones that have lost in these affairs.

 

i also believe that until the laws change then this will be a talking point for many years to come one thing that I feel needs to change is if you go into administration via anyway shape or form then a director or directors should be held responsible for the debt of any company no matter whether it's limited or not the way I'd do that is by taken a set amount of their wages or benefits and if they go bankrupt I'd make it law that they would never have any assets or cash again that way it holds the person responsible for life I know it's harsh but their needs to be a way that this kind of thing stops

 

thanks

Alan

I agree mostly, though if your company goes down through no fault of your own then you shouldn't be punished.

 

If, however, you take your company down through sheer incompetence and/or fraud, then you should be stripped of any asset you currently own, and not receive any form of benefits or wages until the monies owed are repaid.  If its blatant fraud, then you should be jailed.

 

Harsh? Yes.  Its the only way to teach them.  Look at the amount of dodgy car sales businesses, window fitters, builders etc etc that are constantly shutting down and reopening the next day with a slight name change, leaving innocent people, and other businesses in financial ruin. 

 

The people who suffer are the victims, very rarely the perpetrators.

 

'Call me Dave' had previous with N'Thusiasts Resprays.  Couldn't even guarantee the right shade of paint would be used.  Charlatan.

 

 

Edited June 5, 2020 by Half-full

[tomparryharry]

Just to balance it up a bit. I have 3 DJM Austerities, and they all work very well. Perhaps if Mr. Jones had stuck to his initial core  product of the time, he would have (possibly) a healthier cashflow. I know for a fact that you can't buy certain editions of the Austerity, especially NCB No 8, which sold out in about 6 days. Hindsight is a wonderful, or terrible thing, depending on your viewpoint, but I would have put money on selling certain variations of the Austerity, such as the MSC , and Haulwen No2 of Mountain Ash. 

 

Les 1952 of this parish has his own variation of the model, and it looked stunning. As far as the Hattons-DJM  14xx is concerned, I have a dismembered version hereabouts, courtesy of Captain Kernow. It is still my intention to perform a post-mortem on its remains, because I still can't understand  how a model with so much promise, failed to deliver.

 

A perhaps sad end for the loss of expectation, and for some, monetary loss, which was quite extensive. In this little fishbowl of ours, reputation is everything; lose reputation at your peril.......

[roythebus]

I've not been following the DJM thread or this one right from start to finish. Having been the managing director of a company that went into liquidation in 2003 I was surprised to find it had only been closed down and the liquidation finalised 2 years ago!

 

People need to realise the difference between a limited company and an individual. the two are separate legal "persons". The fact that the actual human person is the same human person who is in charge of the paper person (the limited company) is not realised by many. Remember companies can be a one-man-band like DJM Ltd or ICI plc. If the pitchfork mentality was exercised by the general public then no potential entrepreneur would risk anything.

 

Every business is a gamble, some make it, some don't. It may be that Dave put a lot of his own money into developing his business, but it seems he relied on varies funding agencies and they like their repayments paid on the dot. I'd suggest more businesses close down due to lack of forward planning as anything else.

 

The liquidators take their pound of flesh as they are legally required to do. They can only work with what is readily available to them. If documents have "disappeared" then unless they are digitised somewhere then there is little chance of retrieving them.

 

I'd suggest the moral of this is is if any more crowd funded projects are advertised, then do some background research as the stationmaster has done; pay by credit card. That way you'll have some recourse fr a refund if things go wrong. Producing moulds and tooling for model railways is not a cheap business. Many years ago I done the kit for the VGA wagon, that cost me well over £4000 in 1982. I owned the moulds which were made for my and I still have the invoice for them. I haven't seen the moulds since th maker was taken over by someone else.

[Joseph_Pestell]

3 hours ago, roythebus said:

People need to realise the difference between a limited company and an individual. the two are separate legal "persons". The fact that the actual human person is the same human person who is in charge of the paper person (the limited company) is not realised by many. Remember companies can be a one-man-band like DJM Ltd or ICI plc. If the pitchfork mentality was exercised by the general public then no potential entrepreneur would risk anything.

 

 

 

Up to a point. If a company knowingly trades while insolvent, the director can become personally liable. I was involved as creditors' representative in such a case a few years back. It took a while but the person involved ended up paying several million pounds into the liquidation. Not that it did most of the creditors much good.

Did DJ know that the company was trading while insolvent? He certainly should have known but it may well be that he did not understand all the implications. Some of the strange outbursts in e-mails would suggest all was not well.

[Markwj]

3 hours ago, Joseph_Pestell said:

 

Up to a point. If a company knowingly trades while insolvent, the director can become personally liable. I was involved as creditors' representative in such a case a few years back. It took a while but the person involved ended up paying several million pounds into the liquidation. Not that it did most of the creditors much good.

Did DJ know that the company was trading while insolvent? He certainly should have known but it may well be that he did not understand all the implications. Some of the strange outbursts in e-mails would suggest all was not well.

The final rant and email about model companies patent protecting models and preventing others from duplicating the same model was particularly interesting and it made you wonder about Dave's mental state at the time perhaps he could see the car crash coming at that point and knew he couldn't avoid it.

[DY444]

21 hours ago, cctransuk said:

 

Because exercising due diligence would make one very wary of someone who needed to ask for money up-front for a product that was still only a figment of his imagination.

 

If someone approached you with a proposal to produce a new kettle / toaster / food mixer, and wanted you to fund it up-front, would you oblige?

 

Any company that proposes a new venture of high quality should have been able to convince a financial institution to provide funding; if they can't, you should ask why!

 

This whole tale of woe is a classic case of letting enthusiasm and hype cloud judgement, and come before common sense and financial prudence.

 

I hope those affected have learned a lesson.

 

John Isherwood.

 

That pre-supposes all those praising and subsequently criticising handed over money.  I certainly didn't. 

 

I have a soft spot for Class 74, was delighted at the prospect of a state of the art model, wished the project every success and would have almost certainly purchased at least one had it reached the shops and been any good.  I never pre-order anything because I prefer to see what it's like first before purchasing and this was no exception.  If I miss out then so be it.

 

AIUI there have been other model railway ventures based on crowd funding which have delivered the promised products so that suggests the method is viable if competently managed.  Which takes me back to where I came in.  Those placing orders were entitled to believe that this venture would be competently managed and criticising them because it wasn't seems unreasonable to me.  With the benefit of hindsight one can see that there were potential problems but that can said of most things that go wrong.  There are scenarios where schadenfreude is entirely appropriate, typically when pride comes before a fall and no-one else is affected.  However imo this is not one of those scenarios.

Edited June 6, 2020 by DY444

[roythebus]

when I ran GS Models in the 1970s doing cast metal bus kits, people were always asking "why don't you make a model of xxxx". Well, in a couple of cases I did and they flopped. The best selling kit I produced was the RF bus, sold over 1500 from what I remember. Patterns for bus kits in those days were about £300 a set, the first one in 1969 cost £35 as a favour from someone. 

 

As I said in an earlier post the moulds for the VGA kit in plastic were more than 10 times that price. I dread to think of the production costs for a modern loco, I'd suggest somewhere around £350,000. That money has to be found from somewhere, either from shareholder funds, re-mortgaging your house, loans or crowd funding. While ll this development is going on the company is probably trading insolvently. I'd suggest most small companies do that most of the time. 

 

To get back that sort of outlay you need to sell quite a big quantity of the product to get the production costs back. Something like the APT is never going to recoup its production costs especially when it was promised in so many varieties. How many people would but a 14 car set, especially of something that only resides in a museum and had a brief career as a test train.

[MarkSG]

11 hours ago, mdvle said:

"Other models made by DJ Models were completed as contracts for suppliers, such as Merseyside-based Hattons Model Railways, for which it made a 4mm GWR 0-4-2T 14XX class steam locomotive. In these cases, IP ownership rests with the specifier."

 

What IP ownership means is unknown.

 

It means what it says. The intellectual property (IP) - that is, the design right, in this case - belongs to the client, which, in this case, is Hattons. So they could, if they wanted, take those designs and have then built for them by another manufacturer, or even deal directly with a factory and release a new batch under the Hattons Originals branding.

 

Not that they're likely to, in the near future, as their website shows plenty of them still in stock. But the option is there in the future, once those eventually sell out.

[Bedlington North]

Even if he had full access to the J94 toolingto make further batches, there's no guarantee they would have been good sellers. Given the inconsistencies in running qualities of the existing models it's likely that he would have lost money on future runs. Or had to pay out more cash upfront to fix the chassis. 

[tomparryharry]

3 minutes ago, AlexHolt said:

 

Part of the problem with that was that he didn't pay in full for the Austerity/J94 tooling and the factory took it off him to try and recover losses, at one point the factory were even looking for a new UK partner to sell them under. It would have been impossible for him to produce more of them because of this financial dispute. If he had actually paid his bills perhaps he would have been able to produce more of them and have a steadier cash flow, but at the end of the day he didn't and the mismanagement meant that a lot of the announced Austerities never made it to market. I feel that this is why he started announcing all sorts of random models for crowd funding because his main source of income was gone.

 

Well, I didn't know that. I assume your information is from an authenticated source? The reason I say this is because in this funny little hobby of ours throws up some quirks from time to time, which we all know we can well do without. 

 

On a purely personal level, your information throws up some interesting thoughts. It would appear, therefore, that the tooling still exists. Also, the manufacturing company / tool owner might well consider restarting production. What is needed, however, is to sort out the poor reputation that the model suffered from in terms of operability.  The same goes for the 14-58xx  models. 

 

Hope springs eternal! The savings money for the 3 anticipated models which DJM didn't make, is still there, waiting.... I know this is a miniscule amount in the big picture, but I did look forward to spending it.....

 

Cheers,

Ian.

[tomparryharry]

9 minutes ago, MarkSG said:

 

It means what it says. The intellectual property (IP) - that is, the design right, in this case - belongs to the client, which, in this case, is Hattons. So they could, if they wanted, take those designs and have then built for them by another manufacturer, or even deal directly with a factory and release a new batch under the Hattons Originals branding.

 

Not that they're likely to, in the near future, as their website shows plenty of them still in stock. But the option is there in the future, once those eventually sell out.

 

Do they have plenty in stock? I thought it was one variety only. Hang on, I'll have a look......

 

Edit. According to Hattons, they have one only one model in stock, and that is a pre-owned example. 

 

Hmm.

Edited June 6, 2020 by tomparryharry
updated information.

[AY Mod]

23 minutes ago, AlexHolt said:

Part of the problem with that was that he didn't pay in full for the Austerity/J94 tooling and the factory took it off him to try and recover losses

 

You are not able to make that assertion as there is no public evidence for it. My understanding is that whilst initial stage payments for the J94 may have been made the final costs including production and assembly etc was being processed on the costs being amortised over the units produced. Source: DJ in conversation with me. 

 

Therefore DJM may never have had full legal title to the tools even if payments for the J94 were made. My understanding is that the sums owing related to subsequent development projects. 

 

Dave said to me he never made any profit from the J94 due to cost overruns and exchange rate impacts. 

 

Be careful with your assertions please. 

[MRDBLUE17]

13 hours ago, Thebigshot said:

Hi Guy's 

 

i really feel sorry for the ones that have lost in these affairs.

 

i also believe that until the laws change then this will be a talking point for many years to come one thing that I feel needs to change is if you go into administration via anyway shape or form then a director or directors should be held responsible for the debt of any company no matter whether it's limited or not the way I'd do that is by taken a set amount of their wages or benefits and if they go bankrupt I'd make it law that they would never have any assets or cash again that way it holds the person responsible for life I know it's harsh but their needs to be a way that this kind of thing stops

 

thanks

Alan

Alan,

 

Did you really think this through especially at the current time? I have my own business which was doing quite nicely until March when through no fault of mine, I’ve had to close my doors with no income at all from it. Whilst doing everything I can to ensure I get through it I don’t know when I will be allowed to reopen and money will run out at some point. If I didn’t get through it I would already have lost thousands I’ve put into it. 

 

Please just think before typing in future!

 

Mark
 

 

[tomparryharry]

13 minutes ago, Bedlington North said:

Even if he had full access to the J94 toolingto make further batches, there's no guarantee they would have been good sellers. Given the inconsistencies in running qualities of the existing models it's likely that he would have lost money on future runs. Or had to pay out more cash upfront to fix the chassis. 

 

There is indeed, two sides of this. True, the operation of the  model sometimes fell short of the expectation. It would have been down to Dave Jones to sort it out. Anyone taking this project on will - would have to take positive action to remedy the performance aspects. 

 

As far as decoration is concerned, the artwork is pretty spot-on.  I very nearly missed out on the No 8 variant, as it did sell out that quick, but Hattons would confirm that. On that basis, it's pretty much a dead cert that the other Mountain Ash locomotive (Haulwen No2) would have sold in a similar fashion. and, the MSC variant.

 

Once again, on a personal level, there appears to  be a residual element of goodwill towards the models. The oft quoted view is:- " Good model, but the chassis......"

 

Ian. 

[The Stationmaster]

20 hours ago, DavidH said:

 

Or ... we don't know and it doesn't tie up neatly, not if as reported earlier in the thread the two locos were the Class 71 and the Austerity. I'm confused where this "other site" got this information from, however.

Simple conclusion I would have thought -  we know that KR have bought two N gauge CADs and the liquidators report shows IP being sold for £2,300 (that wold be the IP for those CADs).    The two go together as realistic amounts for CADs and we know from the liquidators report that there was no tooling in D JM's assets.  If someone wanted to 'buy' the Class 71 and the J94 the logical thing to do would be to buy the tooling, the IP/CADs would be a waste of time because all they would allow - at considerable cost - would be the production of another set of tooling.

 

There was a secondhand report - source not mentioned - upthread that what had been sold were the Class 71 and J94.  But that leaves one simple question - why would anybody bother to buy the IP (or CADs) when a factory in China is sitting on the tooling and can do whatever it likes with it?  The IP doesn't protect the tooling but only what was registered (one view of a CAD) and it doesn't stop anyone else from designing or producing something, especially if they happen to own the tooling.  The only competitors for the Class 71 and J94 are Hornby and if they are prepared to spend big money to bring out a new Terrier to compete with Rails I doubt they're likely to be frightened by somebody else holding some tooling for a Class 71 or J94, especially when it seems that Class 71s are still in stock with some retailers.

 

13 hours ago, Thebigshot said:

Hi Guy's 

 

i really feel sorry for the ones that have lost in these affairs.

 

i also believe that until the laws change then this will be a talking point for many years to come one thing that I feel needs to change is if you go into administration via anyway shape or form then a director or directors should be held responsible for the debt of any company no matter whether it's limited or not the way I'd do that is by taken a set amount of their wages or benefits and if they go bankrupt I'd make it law that they would never have any assets or cash again that way it holds the person responsible for life I know it's harsh but their needs to be a way that this kind of thing stops

 

thanks

Alan

Somehow I don't think that will ever happen.  It took a long while for the idea of a limited liability company to fully develop and offer a form of protection for those who risk their money.  And don't forget it applies as much to shareholders as it does to directors.  If share ownership, including that by pension funds, was to move to the same situation as that of Lloyds Names (i.e totally unlimited liability) I suspect that shareholders would be looking for the sort of returns which can sometimes be made by the Names.

 

Creating a separate liability for directors - maybe in a manner akin to that adopted for corporate manslaughter prosecutions? - might be feasible but in reality I think it might turn out to be both difficult and cripplingly expensive to implement.  Directors do of course already have fiduciary duty and It is already possible to prosecute them for fraud but even that can result in cases which are too difficult to pursue or which turn out to take a huge amount of time and expense not always leading to a result for the prosecutors.  And I wonder just how many such cases involve small businesses with comparatively small amounts of money at issue?

[Legend]

13 hours ago, njee20 said:

Yeah, put people in the poor house. Good idea. Why don’t we bring back public flogging too?

 

I’m not sure you’ll be getting elected into political office any time soon...

I dunno , based on some current holders of office , worldwide

[spamcan61]

2 hours ago, MarkSG said:

 

It means what it says. The intellectual property (IP) - that is, the design right, in this case - belongs to the client, which, in this case, is Hattons. So they could, if they wanted, take those designs and have then built for them by another manufacturer, or even deal directly with a factory and release a new batch under the Hattons Originals branding.

 

Not that they're likely to, in the near future, as their website shows plenty of them still in stock. But the option is there in the future, once those eventually sell out.

The expensive bit is the tooling though, rather than the design rights as such, and we don't know who owns that. I wouldn't be 100% sure  that Hattons owns it. Seems a bit moot anyway, as you say still plenty available.

[spamcan61]

14 hours ago, Steamport Southport said:

 

The Class 71 was a decent model. It had it's problems, but nothing that couldn't be put right. It was also designed so that you could make a Class 74 from it. The Class 74 was the only one of the models that I did consider ordering blind, but that would have been through Kernow.

 

The problem was Hornby released theirs and many of the retailers discounted it heavily. I think I paid about £60 for my Hornby version.

 

Jason

 

Yeah DJM always seemed to blame somebody else for his many business misfortunes...

 

I wouldn't regard the Class 71 as 'fixable' given the lack of anything like express locomotive performance or its lack of ability to cope with less than laser aligned trackwork.

 

14 hours ago, Steamport Southport said:

The Austerity was better than the antiquated Dapol model which came out in about 1985. But it also had a few issues. Mainly in it's running capabilities.

 

Jason

Hornby's update of the Dapol model may be less detailed than the DJM effort but the Hornby model is at least a consistently good runner IMX so a better bet than playing Russian roulette with DJM models in my opinion.

 

14 hours ago, Steamport Southport said:

Also add in models made for others such as the LSWR O2, Beattie Well Tank and 14XX. All had problems, but in the right hands I reckon those problems could be overcome.

 

Would people buy them if they sorted out the problems? Of course they would.

 

 

Jason

 

Yes I'd buy O2s and Beatties with consistently OK mechanisms, but I can't see it happening.  the current ones just fit the DJM 'nice detail, but good luck getting good running' mould too well.

[PMP]

As far as I’m aware the OO DJM/Hattons 14/58xx has sold out. If there’s plenty available, could someone provide a link to them please.

They (Hattons), do have plenty of Dapol O gauge models listed, which are unconnected to this saga.

[TheSignalEngineer]

11 minutes ago, spamcan61 said:

I'd buy O2s and Beatties with consistently OK mechanisms, but I can't see it happening.  the current ones just fit the DJM 'nice detail, but good luck getting good running' mould too well.

I've got one of the Kernow/DJM Beatties, totally out of context with my present layout which is good as it struggles to shunt more than one coach or three wagons.

Edited June 6, 2020 by TheSignalEngineer

[mdvle]

2 hours ago, MarkSG said:

 

It means what it says. The intellectual property (IP) - that is, the design right, in this case - belongs to the client, which, in this case, is Hattons. So they could, if they wanted, take those designs and have then built for them by another manufacturer, or even deal directly with a factory and release a new batch under the Hattons Originals branding.

 

The article makes several questionable claims - such as someone paying for something regarding the Class 71 and J94, both of which realistically have no value given the competition - so the phrase IP ownership could mean almost anything.

 

And if by design right you mean the CAD drawings, then it is equally as likely that they have the molds as well - as both would have been done in China, and paid for prior to the models making it to Hattons.

 

2 hours ago, MarkSG said:

Not that they're likely to, in the near future, as their website shows plenty of them still in stock. But the option is there in the future, once those eventually sell out.

 

The Hattons website shows none in stock.

 

But as I said, given the number of years it took to sell them I doubt Hattons will be in any hurry to attempt another run, though they could surprise us.

 

 

[adb968008]

On 05/06/2020 at 11:54, JohnR said:

 

Possibly. I was under the impression that while the 71 was not as good as the Hornby model, the J94 was much better? Could we see reuse of those tools?

Class 71 chassis could form a basis for a class 74.

 

given the “write offs” and “who controls what”.. a new body (a single piece body.. there wasnt any notable variations to tool afterall ) could actually make it viable.
 

But I doubt anyone will make any more 71’s for a long time !

 

J94 could show up. Nothing wrong with it. Indeed I think this is the most likely one to show soonest. I dont know why DJ didnt get that second run out asap...it would have been easier money.
 

I understand some initial metal may have been cut for a 92, I certainly think there was some angst expressed on this project, if you dig into that thread you may still find clues.

Heres the early warning sign of where the rails seemed to become a bit shaky...

 

https://www.rmweb.co.uk/community/index.php?/topic/78681-n-gauge-class-17-clayton-locomotive/&do=findComment&comment=3161064

At this point a class 92 CAD existed an n gauge class 17 EP had been seen running...but DJ returned the crowdfunders money and split work between other factories instead..... I wonder if the original factory knew of that decision at that time or how long they had to wait to find out, or how they found out  ?

 

Manufacturers don't just scrap toolings, they know their value. China has accountants too. 

Edited June 6, 2020 by adb968008

[Miss Prism]

1 hour ago, mdvle said:

But as I said, given the number of years it took to sell them I doubt Hattons will be in any hurry to attempt another run, though they could surprise us.

 

It has been available for 3.5 years, which is not very long in my view.

 

Hattons would be mugs to do another batch with the same chassis design,

 

 

[PMP]

1 hour ago, adb968008 said:

 

J94 could show up. Nothing wrong with it. Indeed I think this is the most likely one to show soonest. 

Whilst it looked good overall, the mechanical elements were poor. A revised chassis would be a significant improvement, if someone takes it on they would have the make that choice to revise With additional costs, or sell in original format. Either way it certainly isn’t going to sell like Hornby Pecketts.

[Guest Half-full]

1 hour ago, adb968008 said:

Class 71 chassis could form a basis for a class 74.

 

given the “write offs” and “who controls what”.. a new body (a single piece body.. there wasnt any notable variations to tool afterall ) could actually make it viable.
 

 

Only the chassis/bogie frames, motor and gear train could be used, the 74's bogies and underframe equipment were quite different from the 71