JD Classics, what have they been up to?
Discussion
skwdenyer said:
DonkeyApple said:
skwdenyer said:
Debt-equity? Whose debt? Did HPS buy the bank’s debt?
It just means that the lenders to JD have taken equity in the new venture instead of taking cash. 
my point was that if Lloyd’s were owed £100m, why would they allow the business to be sold for no money down to another debt holder?Is it possible Charme loaded up the business with secured debt, then “sold” their debt to these new guys who have now called it? There’s reference to a 30m intercompany loan.
Other than that, I only see Lloyd’s name.
New fund has come along, completely out of the blue and with no connection to the old VC, certainly not invited, to the rescue. In order to procure the assets they’ve done an equity deal with the lenders to JD who have cancelled their debt in JD in exchange for equity in the new SPV controlled by the new and obviously wholly unconnected VC.
So if Lloyd’s were the lead backer in the Charm SPV that controlled JD they are now the lead backer in the new SPV that controls the assets that once belonged to JD. All that’s really changed is that they once controlled those assets and the return from them via debt but now it’s via equity.
That was my understanding of the debt-equity deal done by the lenders.
The question would be who has lost money? We can guess that any shareholder who wasn’t a controlling party of the Charme SPV will have taken a 100% hit. As will any lender to the firm who wasn’t secured against any assets via the SPV such as the operating bank who may have been running an overdraft. Client funds? You’d like to think that any customer who had funds in transit will have been paid but there is arguably no specific requirement. What may save them is that considering the goods involved there is too much risk that they will be the type of individual that you might bump into next week at the club and who could make quite a noise.
Have Lloyd’s or Charme lost any money? That’s very hard to tell. Generally in these things the managers won’t have lost money. Charme will have had an equity stake in their SPV etc but it’s unlikely that they will have paid the same for it as the backers. Lloyd’s may arguably have converted £100m of debt into a lower amount of equity but that £100m of debt would have been from a pool raised from multiple investment sources so each of those investors take a shave if there is one.
And then there is a whole raft of tax write-offs, losses and fees to be earned.
In the separate matter of Hood’s wealth. Anyone know how wealthy he is? Who owns the U.K. property he lives in? How much of his wealth is held within the U.K.? How much of his supposed wealth was equity in JD? Assuming he was locked into his shareholding in JD did he borrow against that holding to fund his U.K. needs? When Charme bought in to JD it would be unusual for a VC not to supply advice to the target company’s major shareholders as to how to receive any cash payment so as to be tax efficient etc.
Any cash Hood may have been paid in the original transaction may be securely held overseas or in trust. His U.K. assets may be financed by debt secured against his remaining U.K. registered shareholding in JD.
I have absolutely no idea but it is perfectly possible that Hood does not have a penny to his name as far as someone like Tuke is concerned?
It’s a good job that the poor aren’t penniless and grow up in a country where they receive free housing, healthcare, food and education and have such a tremendous opportunity to not remain where they were born.
There are even wild tales that such people can end up so successful that they enjoy a life down in France with lovely classic cars.
Or even end up selling their hugely successful classic car business to a VC firm for vast sums, despite being born in Essex. Or can build an entire orthopaedics empire and sell up for a vast fortune.
Our system certainly is not perfect and there is room for further improvement but, by God, is being born poor in this country mind glowingly better than being born poor in any other country.
There are even wild tales that such people can end up so successful that they enjoy a life down in France with lovely classic cars.
Or even end up selling their hugely successful classic car business to a VC firm for vast sums, despite being born in Essex. Or can build an entire orthopaedics empire and sell up for a vast fortune.
Our system certainly is not perfect and there is room for further improvement but, by God, is being born poor in this country mind glowingly better than being born poor in any other country.
DonkeyApple said:
There are even wild tales that such people can end up so successful that they enjoy a life down in France with lovely classic cars. ;.
I'll drink to that! But to put the record straight I did make the acquaintance of cardboard city in my wild youth in London in 1965. I knew Derek in his embryonic days and to be fair all of them, classic or modern, were just second hand car dealers. Whining axle or gearbox? Add a liberal amount of sawdust.tyres looking dodgy? Get out the boot polish; and so on. A friend at Wadhams Stringer tried to sell me an MG 1300 once, and the plumes of smoke coming out the back were enormous. Even as a friend I got the remark "they're all like that sir". No, I've always examine my cars myself with the exception of the short nose D-type which was recommended to me by a past owner who regretted selling it. But I had someone else examine it for me. I think, from what I've read of the first court hearing, that Derek deserves what he gets since the fool put everything in writing, but it ceases not to amaze me how people are parted from their money so easily. If you are interested, I have a Picasso for sale. Just wait a week while the paint dries before coming to see it though.
Indeed. My father went to buy a D Type that was up for £2,000 back in the day and it was an absolute nail with next to no original parts. Luckily by the 80s the person who did buy it had rediscovered every single original part. Likewise, my father later got the nod on a MKII from Phil Challis that was sitting in a police compound. He was told to go and buy it as he wouldn’t be displeased. He campaigned that for two seasons with great success as it had a rather special engine in it that had come from an EType. Again, luckily by the 80s the new owner of that Etype had managed to source an identical engine right down to having the same number. That was a real stroke of luck.
Tuke’s situation is an interesting one as I don’t believe there are any disputes over the provenance of the cars and I don’t believe he was forced into buying them at the price he paid but that he stumbled across the trivial detail that Hood had been dealing as principal when their co tract was as an agent and so Tuke is keen to have a share of the uplift that Hood made by acting as principal. It doesn’t read that he has lost any money but rather lost out on some money. It’s hard to know if the buyer over paid or the seller was under paid, just that the recipient of that transaction spread should not have legally been Hood or JD.
Tuke’s situation is an interesting one as I don’t believe there are any disputes over the provenance of the cars and I don’t believe he was forced into buying them at the price he paid but that he stumbled across the trivial detail that Hood had been dealing as principal when their co tract was as an agent and so Tuke is keen to have a share of the uplift that Hood made by acting as principal. It doesn’t read that he has lost any money but rather lost out on some money. It’s hard to know if the buyer over paid or the seller was under paid, just that the recipient of that transaction spread should not have legally been Hood or JD.
I was always under the impression that you included every possible party in your litigation claim to avoid any defendant pointing fingers at the others - I can only speak for medical litigation where every possinle named doctors, nurses, hospital, the porters, their employers, managers, etc, etc etc are named respondents - the respondents all have defending solicitors who then get together and form a defence team and ultimately divvy up the responsibility/blame percentages when agreeing any financial settlement - we have been caught tangentially caught up in this even when our employed doctors was not directly involved but just happened to be on duty at the time of the incident giving rise to the claim - sister was a criminal prosecutor explained to me the processes involved.
There is the claim and any subsequent award but I suspect the real fun will be after that after when Hood declares bankruptcy and then creditors play “hunt the missing money” not unlike an acrimonious divorce.
I suspect there will be currently be investigators tasked with ensuring no further funds “disappear” off Hood’s asset register as it were.
There is the claim and any subsequent award but I suspect the real fun will be after that after when Hood declares bankruptcy and then creditors play “hunt the missing money” not unlike an acrimonious divorce.
I suspect there will be currently be investigators tasked with ensuring no further funds “disappear” off Hood’s asset register as it were.
DonkeyApple said:
Tuke’s situation is an interesting one as I don’t believe there are any disputes over the provenance of the cars and I don’t believe he was forced into buying them at the price he paid but that he stumbled across the trivial detail that Hood had been dealing as principal when their co tract was as an agent and so Tuke is keen to have a share of the uplift that Hood made by acting as principal. It doesn’t read that he has lost any money but rather lost out on some money. It’s hard to know if the buyer over paid or the seller was under paid, just that the recipient of that transaction spread should not have legally been Hood or JD.
In fairness, while Mr. Tuke appears to have been exceptionally naive and imprudent, to describe the misunderstandings between him and Mr. Hood as a trivial detail is a rather unusual position to take!There was, in fact, never a contract between the relevant parties (a situation which has been to Mr. Tuke’s benefit in light of the judgements earlier this year) but the blatant dishonesty/fraud exposed in some of these deals is breathtaking. This was systematic, documented, and on a scale and scope far beyond sawdust in a gearbox on a single purchase. I can perhaps only point to paragraph 130 (and no, it isn’t about the deal with the Aceca or the 300sl) in the judgement below as just one example of actions that were surely far from trivial?
http://www.wilmotslitigation.co.uk/sites/default/f...
roygarth said:
Used car dealing is pretty much an un-regulated market. Un-regulated markets always attract the tinkers. Just look at Switzerland.
Whenever I buy a car, whether its a Ferrari or a Mini, I always remind myself that ALL CAR DEALERS ARE POTENTIALLY AND PROBABLY ARE DODGY.
There’s no formal regulation which is why it’s a career of choice for brokers and bankers who are no longer permitted to work in regulated environments. And why classic practices which are specifically banned in financial markets are rife. Whenever I buy a car, whether its a Ferrari or a Mini, I always remind myself that ALL CAR DEALERS ARE POTENTIALLY AND PROBABLY ARE DODGY.
I’d love to learn how Tuke discovered JD/Hood we’re dealing as principal. I’m guessing he bumped in to someone who knew what one of the cars had been sold for and to whom. Is this detailed at all in any of the proceedings?
DonkeyApple said:
I’d love to learn how Tuke discovered JD/Hood we’re dealing as principal. I’m guessing he bumped in to someone who knew what one of the cars had been sold for and to whom. Is this detailed at all in any of the proceedings?
I am into old Alfas and Lancias (not in the this price category) but even at my level it is a relatively small circle and you are bound to bump into previous owners or others who know when the "matching numbers" engine was found and who rolled the car, why it was previously sold, etc and when it developed into a more exotic variant of the model. also, as a dealer, JD or Hood's name wold not be on the V5 but the previous owner would be so he may simply have contacted a previous owner to see if there was any more history on any particular car.
Monkeylegend said:
lowdrag said:
If you are interested, I have a Picasso for sale. Just wait a week while the paint dries before coming to see it though.
Most likely Cat N or S though.https://www.newyorker.com/magazine/2006/10/23/the-...As for previous owner details on the V5, GDPR has put a stop to that, for better or worse.
DonkeyApple said:
There’s no formal regulation which is why it’s a career of choice for brokers and bankers who are no longer permitted to work in regulated environments. And why classic practices which are specifically banned in financial markets are rife.
I’d love to learn how Tuke discovered JD/Hood we’re dealing as principal. I’m guessing he bumped in to someone who knew what one of the cars had been sold for and to whom. Is this detailed at all in any of the proceedings?
I think the final warning bell was certainly sounded with the sale of his 300sl. It's detailed in para 82 here and worth reading as evidence of the blatant fabrication excercised by HoodI’d love to learn how Tuke discovered JD/Hood we’re dealing as principal. I’m guessing he bumped in to someone who knew what one of the cars had been sold for and to whom. Is this detailed at all in any of the proceedings?
http://www.bailii.org/ew/cases/EWHC/QB/2018/531.ht...
In summary Hood claimed to have sold the car in Oct/Nov 13 to a 3rd party who wished to pay in installments. In actuality no such buyer existed and JD auctioned the car via Bonhams in July 14. Tuke was apparently surprised to hear that this car was being advertised for sale on JD's stand at Retromobile in Paris in Feb 14 but Hood claimed that it was being advertised on behalf of the buyer (please bear in mind Tuke had not been fully paid for the car by this point...)
It is interesting to note that the legal documents only reference one relatively minor further transaction (the sale of an XK150s) following this fracas
The relationship was clearly going sour from late 2010 however with Tuke increasingly desperate to release funds it seems Hood simply wasn't selling cars fast enough. Again that is quite clearly documented in para 77 of this judgement
http://www.wilmotslitigation.co.uk/sites/default/f...
And apologies for missing the nuance in your earlier post!
silentbrown said:
As for previous owner details on the V5, GDPR has put a stop to that, for better or worse.
You would think that some of these cars would come with history files containing invoices with owners' names on them. However, I'm not convinced that Tuke even saw the cars he was buying, let alone looked through the cars' histories.thegreenhell said:
You would think that some of these cars would come with history files containing invoices with owners' names on them. However, I'm not convinced that Tuke even saw the cars he was buying, let alone looked through the cars' histories.
Ultimately isn't that what he appointed an expert for?Given the number of transactions and the level of car he engaged Hood to do the due diligence and in this regard he was treated fraudulently. I am sure a number of us have engaged an expert to assist us with a purchase in the past, and at this level rummaging through v5s and invoices doesn't really cut it... As lowdrag (in particular) so eloquently explained with reference to various D types earlier in the thread this is a deeply murky world
I think it's also fair to say that these cars are rare or well known enough (JWK 651 has even had a book written about it) that one might not need to actually see them prior to purchase
As an example you win the euro millions and have the capacity to buy your dream car (for the sake of argument a Jaguar XKSS). A broker tells you one has become available but that you must act now- it is a car you know and you have seen pictures of, it is the first one on the market for 2-3 years, the expert is encouraging you and perhaps there simply isn't the time or possibility to view the car. Do you let it go or do you follow your heart and gut and go for it?
I bought a car sight unseen (and for more than intended) earlier this year and while entirely unwise surely every car mad enthusiast can empathise with the rush of the head that can get you there?
Tuke was clearly naive and should have questioned the fact that he was relying on the man whose name was at the top of the invoice to vouch for the quality of the car, but one has to assume that he was relying on JD valuing their own reputation and name. They had (as is becoming apparent) rather a lot to lose in the event of fraudulent activity
Edited by George 500 on Thursday 27th September 11:35
Burwood said:
What George just said at the end 'he relied on Hood wanting to maintain JDs reputation', as giving considerable comfort, is spot on.
And look what has happened. Poof, there goes a 100M business and potential financial ruin. Who would have guessed it.
Interesting isn't it, makes you question who the greater fool was at the end of the day!And look what has happened. Poof, there goes a 100M business and potential financial ruin. Who would have guessed it.
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