JD Classics, what have they been up to?

[R8Steve]

TooMany2cvs said:

"Spot on" in the sense that the returns really were literal fantasy? It's either that or that they were possible, but only short-term while the whole Ponzi scam had new money coming in.

Hood bought a AC for £84k and sold it to Tuke for £254k three weeks later. I'd say that is a pretty good return.

[TooMany2cvs]

R8Steve said:

TooMany2cvs said:

"Spot on" in the sense that the returns really were literal fantasy? It's either that or that they were possible, but only short-term while the whole Ponzi scam had new money coming in.

Hood bought a AC for £84k and sold it to Tuke for £254k three weeks later. I'd say that is a pretty good return.

That seems to support my question, rather than answer it...

anonymous said:

[redacted]

I'm not entirely comfortable with "defrauded". It's unambiguous that he paid way too much for specific cars, or they weren't being sold by who he thought they were. But is that "fraud"? Would "defrauded" not suggest the cars simply didn't exist, or weren't what were claimed?

Or have I missed something, and that is a part of it?

[singlecoil]

TooMany2cvs said:

anonymous said:

[redacted]

I'm not entirely comfortable with "defrauded". It's unambiguous that he paid way too much for specific cars, or they weren't being sold by who he thought they were. But is that "fraud"? Would "defrauded" not suggest the cars simply didn't exist, or weren't what were claimed?

Or have I missed something, and that is a part of it?

The pertinent fact is that the judge decided Hood was Tuke's agent, so very definitely fraud.

[Burwood]

The judges own words Hood engaged in “deliberate and dishonest conduct”

[f1ten]

Sad reading this but like many have said on here. It's an unregulated business and prices of cars bought can vary wildly.

Livia1 said:

Some facts amongst the speculation

1. Lloyds Bank appointed the Administrators to protect its own position
2. One of the grounds for administration was that the Company was unlikely to be able to pay its debts.
3. It was unlikely to pay its debts because Mr Tuke was suing it for sums in excess of £40m as a result of fraudulent transactions, not "financial irregularities" which the press release states. The £9m mentioned earlier relates to only one of the five cases issued by Tuke.
4. Hood was fired and did not leave peaceably
5.The company has no prospect of being able to pay all its debts since it is clear from the published accounts that it owes gigantic sums to the banks and will inevitably go bust after the pantomime of administration is over. A completely different company may or may not take over the name but not the debts.
6. Hood is a very rich man but faces parallel claims from Mr Tuke as well as an even bigger one from Charme.

[lowdrag]

This whole thread is going round in circles without people bothering to read the whole thing. Take the case of fraud or not, and in particular the AC Aceca, Hood was acting as the agent of Tuke, taking no fees or commission up front but taking a 10% commission on the resale. In the case of the Aceca JD Classics bought the car for £84,000 and Hood sold it to Tuke for £254,000 three weeks later with all the time Hood supposedly acting as agent, not selling the car on behalf of his own company. Now that seems to me to be fraud because the agreement was between Hood himself and Mr. Tuke. JD Classics were no part of this agreement, and Hood was to act as broker with the seller of the car. The judge agreed. I suggest that people go to the court hearing and read the email trail between Tuke and Hood and then make up their own minds if they really need to. A fool and his money are soon parted, but if the parting is illegal, which I simcerely believe it to be here, then woe behold the parter when sued by the partee. And I hope I am not wrong, but I think you will find that Tuke is suing JD Classics and Hood jointly and severally. To me, that indicates that Hood may well not figure in the Sunday Times Rich List next year.

[singlecoil]

lowdrag said:

...that indicates that Hood may well not figure in the Sunday Times Rich List next year.

But his wife might...

[Burwood]

singlecoil said:

lowdrag said:

...that indicates that Hood may well not figure in the Sunday Times Rich List next year.

But his wife might...

There are numerous ways of defeating any gifts or trusts

[Matty3]

Reading the Court Report it beggers belief that Tuke had his leg lifted for so long, without realising the situation. On a rising Classic Car market some of the losses incurred on reselling the majority of his cars through JD are absolutely mind boggling!!!

Should act as a cautionary tale to the top end classic car 'investors' brigade.

I wonder if JD will seek to appeal (like (but on different grounds) the Stanley Mann case)? - although the judgement does appear rather damning and conclusive....

[jaisharma]

In general appeals are on questions of law rather than fact

[Discombobulate]

anonymous said:

[redacted]

I think it might, not least because it will worry those institutions funding classic acquisitions. If they tighten the purse strings we could see the start of a tumble. There is, of course, much more to the current market heights than rich investors and enthusiasts. A lot of dealers are very exposed if market stalls. And if their banks get nervous...

[singlecoil]

Burwood said:

singlecoil said:

lowdrag said:

...that indicates that Hood may well not figure in the Sunday Times Rich List next year.

But his wife might...

There are numerous ways of defeating any gifts or trusts

Do they all work? What about if the money (or whatever was bought with it) is outside the UK?

[Burwood]

singlecoil said:

Burwood said:

singlecoil said:

lowdrag said:

...that indicates that Hood may well not figure in the Sunday Times Rich List next year.

But his wife might...

There are numerous ways of defeating any gifts or trusts

Do they all work? What about if the money (or whatever was bought with it) is outside the UK?

OT- increasingly so. Today Trusts do not work in shielding miscreants. Anyway let's see what happens first.

[C4ME]

_Sorted_ said:

classicaholic said:

singlecoil said:

Maybe, but that depends on whether people are prepared to pay that kind of money for that kind of work at the moment With a likely downturn in the market they might be a bit reluctant.

I think there are a lot of cars in garages that people have bought with the intention of 'doing up' like car SoS does in just 2 weeks for hardly anything and they thought they can make a fortune, I suspect if a market adjustment occurs after the JD affair then a lot of these cars are massively uneconomical to rebuild and the restoration industry could collapse quite quickly, its surprisingly expensive to do a nut & bolt rebuild, we might see the sales of filler going up though!

^^^^This. Have been told a similar story by two owners of high end restoration businesses about last classic car downturn. Both had closed books on new business as their orders were stretching to five years plus. Downturn occurs. Cancellations come in and they work their way down list of booked in projects. In both cases extremely little of the promised biz ever occurred. Both narrowly avoided going under.

I can see how we may be heading here again. I have been a fairly close observer of the classic Porsche restoration scene over many years and as the prices of the cars have skyrocketed so have the restoration costs. Work that would have cost £10,000 five years ago now costs £30,000 today for the same work and quality. This pricing strategy might have been sustainable in a rising market but doesn't work otherwise. The drop off can be sudden as a result.

[Matty3]

jaisharma said:

In general appeals are on questions of law rather than fact

Agree but to expand: In most cases, the defendant must be able to show that the trial court didn’t act correctly in regards to the law or show that there was some violation of the defendant’s rights.

Or some further evidence not presented at the original trial may prove admissible.

Whatever I do not foresee an appeal being lodged in this case

[DonkeyApple]

anonymous said:

[redacted]

JD’s lenders are about to take a bath. Lenders are quite simplistic in their thinking in reality and they will now not be so excited about not only lending more but the returns on what they have lent to date. And this is a market that has been fuelled and is underpinned by debt.

The chap running his loan book on cars isn’t going to be so bullish at the Monday morning meeting when asking for an increase in his underwriting capacity. In fact, they are all going to be keeping their mouths closed and hoping no one starts trying to pitch for the credit line they currently have.

[classicaholic]

It’s not going to be just the big boys though, I was talking to a chap at Goodwood who has taken a drop of 17k on an E Type in a year, if that was borrowed money then it takes a lot of finding. There are plenty of ‘investors’ who bought cars using borrowed cash who must be loosing a bit of sleep at the moment.

All my cars are paid for and my toy box & not for sale so I have no axe to grind!

[DonkeyApple]

anonymous said:

[redacted]

If they thought independently but it really works far more as a collective. Most of the lenders to the market are subsidiaries and secondaries who borrow themselves from a prime bank. One of those prime banks has just been kicked in the nads, the desk that wrote the deal will be wanting to keep its head down and the heads of desks at other banks will not be wanting to get themselves kicked in the nads. There will be caution all round. But more importantly, the money that would ha e gone to them for more lending will go to other desks and this means there will be less new money into the market. But at the same time they will be wanting to make sure existing loans are secure and some of those might be deemed weak and need reviewing etc. And this is all happening when prices have been soft for a while and buyers haven’t been in quite the rush as in the past.

Whether it all adds up to anything of great significance only time will tell.

[DonkeyApple]

classicaholic said:

It’s not going to be just the big boys though, I was talking to a chap at Goodwood who has taken a drop of 17k on an E Type in a year, if that was borrowed money then it takes a lot of finding. There are plenty of ‘investors’ who bought cars using borrowed cash who must be loosing a bit of sleep at the moment.

All my cars are paid for and my toy box & not for sale so I have no axe to grind!

Lots of dealers running plenty of debt also. There’s just a lot of debt in the market. Even those who haven’t got debt directly on their cars have debt elsewhere and toys go before homes and businesses. What the market doesn’t need right now is lenders reigning that in.

[LotusOmega375D]

C4ME said:

I can see how we may be heading here again. I have been a fairly close observer of the classic Porsche restoration scene over many years and as the prices of the cars have skyrocketed so have the restoration costs. Work that would have cost £10,000 five years ago now costs £30,000 today for the same work and quality. This pricing strategy might have been sustainable in a rising market but doesn't work otherwise. The drop off can be sudden as a result.

Not relevant to this thread, but a good point generally. I remember a Ferrari 250GTO restoration being featured in an Octane a few years ago. It needed pretty much everything doing and cost £100K to restore by a marque expert. That was considered massive bucks back then. That’s the bottom line figure banded about for restoring common or garden E-Types nowadays, which are worth 0.5% as much! It’s just not worth that sort of money.