JD Classics, what have they been up to?
Discussion
lowdrag said:
I haven't read it all, but it seems to me that Tuke sued for £9 million and effectively was awarded a tad short of this sum. A result for Tuke, but - will he see the colour of Hood's money?
Awarded £4.2 million damages, plus £8.9m for "loss of investment opportunity". Plus compound interest, yet to be calculated!Hood was declared bankrupt in Feb this year, after HMRC went after him for a £1m tax bill...
There's £38m down the back of someone's sofa, obviously.
RichB said:
BobToc said:
RichB said:
They being who in this case, Derek Hood?
And his wife. From paragraph 109:[quote]On 12 August 2016, all the shares in JDC Classics Holdings Ltd were purchased by Daytona Bidco Ltd ("Daytona Bidco"), an SPV incorporated by Charme Capital Partners, a private equity fund, for the purpose of acquiring and holding the shares in JDC. Mr. Hood remained CEO and director, and a major beneficial shareholder. Mr. and Mrs. Hood received consideration in excess of £38m in respect of that sale.
Having just experienced the sale of a company for £55m over the last 6 months I am amazed that none of the "dodgy dealings" (can't call them fraudulent because back then they were judged as fraudulent) were not exposed by the buyers due diligence. We had a team from Ernst & Young, a team of software specialists and the buyer's lawyers crawling all over every piece of information in the data room. For such blaten crooked operations to have slipped through makes me wonder whether the buyers didn't really want to know too much about it.
The problem was proper fraud, false paperwork and third party involvement. Interesting to see if further court cases emerge or whether it’s all settled ‘behind the scenes’.
Edited by ettore on Tuesday 27th October 12:08
I’m not sure I’d describe it as “full” when paragraph 122 says the following:
The affidavit supplied in support of that application stated that the Administrators "have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be …" including that: "a. at least 29 of JDCL's top 50 sales by profit were fictitious, of which 28 were entirely fictitious; b. at least a further 15 sales, including four of the top 50 sales by profit, related to a transaction with a third party which was allegedly not concluded but was recorded in the books and records; c. in addition, outside the top 50 sales, a further 8 sales were entirely fictitious; … f. Mr. Hood was only able to accomplish this alleged fraud because, in large part, he appears to have either grossly overstated the value of sales and purchase transactions which did occur, or to have generated entirely false sales and purchase transactions in JDCL's books and records."
They may have highlighted an inability to determine the veracity of trades in their report, or it maybe a reflection of the scope of work, or Hood’s determination, but it is quite incredible.
The affidavit supplied in support of that application stated that the Administrators "have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be …" including that: "a. at least 29 of JDCL's top 50 sales by profit were fictitious, of which 28 were entirely fictitious; b. at least a further 15 sales, including four of the top 50 sales by profit, related to a transaction with a third party which was allegedly not concluded but was recorded in the books and records; c. in addition, outside the top 50 sales, a further 8 sales were entirely fictitious; … f. Mr. Hood was only able to accomplish this alleged fraud because, in large part, he appears to have either grossly overstated the value of sales and purchase transactions which did occur, or to have generated entirely false sales and purchase transactions in JDCL's books and records."
They may have highlighted an inability to determine the veracity of trades in their report, or it maybe a reflection of the scope of work, or Hood’s determination, but it is quite incredible.
RichB said:
Thanks, and wow.
Having just experienced the sale of a company for £55m over the last 6 months I am amazed that none of the "dodgy dealings" (can't call them fraudulent because back then they were judged as fraudulent) were not exposed by the buyers due diligence. We had a team from Ernst & Young, a team of software specialists and the buyer's lawyers crawling all over every piece of information in the data room. For such blaten crooked operations to have slipped through makes me wonder whether the buyers didn't really want to know too much about it.
Professionally speaking, I think I can say that quite a few people working due diligence are nowhere near as crafty or 'smart' as those cooking the books. And they're on the clock, to a degree...so if something doesn't smell/feel dirty on the surface, it probably won't get dug-into...unless/until there's a criminal case...when the forensic accountants are called in.Having just experienced the sale of a company for £55m over the last 6 months I am amazed that none of the "dodgy dealings" (can't call them fraudulent because back then they were judged as fraudulent) were not exposed by the buyers due diligence. We had a team from Ernst & Young, a team of software specialists and the buyer's lawyers crawling all over every piece of information in the data room. For such blaten crooked operations to have slipped through makes me wonder whether the buyers didn't really want to know too much about it.
havoc said:
Professionally speaking, I think I can say that quite a few people working due diligence are nowhere near as crafty or 'smart' as those cooking the books. And they're on the clock, to a degree...so if something doesn't smell/feel dirty on the surface, it probably won't get dug-into...unless/until there's a criminal case...when the forensic accountants are called in.
And the frenzy of a gold rush doesn’t help as it was back then for VCs. They were awash with cash, had a massive shortage of skilled front office staff so the majority were operating with substandard employees both in front, middle and back office and all in a rush to get the deal done before someone else snapped it up. During such periods you always get duff deals being done and some frauds. The whole saga says a lot about the people inside Charme during that period. ‘NUTS’ is the general phrase, as per RBS and HBoS when they were trying to compete against the big boys and ended up with a load of toxic and mispriced deals and hoovering up all the dross clients. Not Up To Standard. You can see the exact same in the retail P2P and crowdfunding markets, it’s all junk, mispriced, under researched in a rush for fees and to win business off equally poor competitors.
You have to assume that a more forensic level of DD would have caused an investor to walk away and it may even have been the case that Charme didn’t trigger the deal but picked it up where others had decided to put it down but back then there would have been a rush on to get the investor cash out and into the market, fees booked, the debt loaded on and start prepping for flogging off in a few years time once the massive debt loading had generating the inflated revenues.
All, in reality, very similar to Tuke who unlike the clients who declined the deals from Hood maybe did less DD than he should have done in his rush to get his investment portfolio divested of cash and to be seen in the market place as a player and someone doors are held open for.
Harsh but the reality is that there would have been more seasoned investors for whom Hood’s products would not and did not pass the sniff test.
If Hood’s entire empire was a planned systematic fraud where he set out years before to artificially inflate the books so as to procure a hugely inflated sale price to private equity then it would be very odd if once he had those proceeds in his hands he didn’t very rapidly and efficiently ensure they were protected from ever having to return them. Even if it were just the classic case of a jumped up man’s ego ending up massively over inflated and needing to cook the books to keep the hot air being blown up himself, it seems likely such a smart man would have done a squirrel.
I would imagine that the assets he decided to keep in the UK have probably gone now in costs and the like and that he will now sit at the overseas table with all of his ilk enjoying dinners with this specialist group of offshore residents from all over Europe who have done the same thing and now live the same life where they all pretend to each other that they are kosher and nothing really happened.
When people are asked why they keep paying UK tax and don’t go and live offshore, the real answer isn’t because the UK is so unbelievably awesome but rather that they’ve been to those offshore places and realised just how full of total scumbags they are and that every second person is some burnt out, alcoholic or punter who left their regulated market before the regulator finally got them ‘facilitator’ operating under the FILTH moniker.
Charme should have insurance so once they’ve gone through the motions of trying to collect they can decide if they want to make a claim. They might not want to if it wasn’t their money they punted in but superficially, it seems unlikely that Tuke will get anything. Surely it is now a case of weighing up how much it is going to cost to chase Hood v the likelihood of getting anything? Isn’t that the stage he now finds himself at after a well earned victory in the courts?
It's an interesting read if you've got the time !
Some of the alleged email exchanges are an eye opener !
Tuke starts out with £60 mil, not much later he appears to need to raise cash, there's an £8 mil loan from Close Finance, and they're down to talking about a £250k car where he seems to reluctantly agree but says don't tell the missus !
Some of the alleged email exchanges are an eye opener !
Tuke starts out with £60 mil, not much later he appears to need to raise cash, there's an £8 mil loan from Close Finance, and they're down to talking about a £250k car where he seems to reluctantly agree but says don't tell the missus !
The judgement seems to have been taken down, but I have found it on Casemine though. Frankly, not being a lawyer or barrister, it makes my head spin, and this morning I have received a call from an interested party making reference to several people extremely well known in the Jaguar world who "don't seem to come out of this favourably". I can't seem to find this particular paragraph though. Also, in the post taken down the judgement and awards were mentioned but no longer on Casemine. . Can someone elucidate please?
lowdrag said:
The judgement seems to have been taken down, but I have found it on Casemine though. Frankly, not being a lawyer or barrister, it makes my head spin, and this morning I have received a call from an interested party making reference to several people extremely well known in the Jaguar world who "don't seem to come out of this favourably". I can't seem to find this particular paragraph though. Also, in the post taken down the judgement and awards were mentioned but no longer on Casemine. . Can someone elucidate please?
Still working fine for me. https://www.bailii.org/ew/cases/EWHC/Comm/2020/284...I've got a PDF downloaded if you're still struggling.
Doofus said:
Why in the world would Tuke have paid £1.3m for a J2X?
Having spent too much time reading the judgement last night, and thinking about it on reflection, its almost like a grooming situation. Tuke must have been naive in the extreme, and at the same time was surely taken advantage of in no small way. I’ve just had a quick look through it. Yee gods, it must have taken ages to type that lot up !
Still seems to me, that Tuke was a naive, fool, with too much ££ money. He had sold his medical co for in excess of £60 million pounds. Less tax etc and @ his age, he could have lived a Very comfortable life, for the rest of his life. In WAY more comfort than many of us on here.
But ok, he wanted his remaining ££ considerable cash pot, to make him more money, so he approaches a top end, classic car dealer, with a view to “ investing in classic cars “ . It just staggers me, that as a Very successful person, he didn’t carry out considerable and detailed research, into the History / the market place / the kind of cars that he was interested in buying / owning / investing in / and also hanging onto, ie the JWK XK120, which, unsurprisingly, he appears to have had a great fondness for.
Interesting that Richard Hudson Evans was involved in inspecting several of the cars, inc the XJR13s. I had no idea, that he carried out classic car inspections / valuations.
Interesting also, re the Letter that is mentioned, re JDCs Terms and Conditions, which it states, was hung on the show room walls.
Still seems to me, that Tuke was a naive, fool, with too much ££ money. He had sold his medical co for in excess of £60 million pounds. Less tax etc and @ his age, he could have lived a Very comfortable life, for the rest of his life. In WAY more comfort than many of us on here.
But ok, he wanted his remaining ££ considerable cash pot, to make him more money, so he approaches a top end, classic car dealer, with a view to “ investing in classic cars “ . It just staggers me, that as a Very successful person, he didn’t carry out considerable and detailed research, into the History / the market place / the kind of cars that he was interested in buying / owning / investing in / and also hanging onto, ie the JWK XK120, which, unsurprisingly, he appears to have had a great fondness for.
Interesting that Richard Hudson Evans was involved in inspecting several of the cars, inc the XJR13s. I had no idea, that he carried out classic car inspections / valuations.
Interesting also, re the Letter that is mentioned, re JDCs Terms and Conditions, which it states, was hung on the show room walls.
In some ways, he comes across as a total mug desperate to buy his way into high society at any cost. And in a fleeting moment of sobriety found that Hood had acted as principle not agent as per their agreement and saw a way of getting some money back.
In some of the transactions it does look like Hood legged over the original seller and got the item well below market before selling to Tuke at market and that the actual aggrieved party, if any, was the person Hood bought the car from.
All very sad any way it’s cut and I don’t think anyone comes out of it looking particularly clever.
In some of the transactions it does look like Hood legged over the original seller and got the item well below market before selling to Tuke at market and that the actual aggrieved party, if any, was the person Hood bought the car from.
All very sad any way it’s cut and I don’t think anyone comes out of it looking particularly clever.
I suspect it's the human fallacy of believing that expertise in one area met with massive reward for that expertise equates to a similar level of expertise in something totally unrelated. I understand in his chosen field of engineering he was very successful & held in high regard. It could be argued, perhaps, that he fell into the trap of thinking his business acumen was innate & the key to his previous business; whereas it may have been because his engineering successes where well timed to hit a rising market, & his monetary success was a result of that.
DonkeyApple said:
In some ways, he comes across as a total mug desperate to buy his way into high society at any cost. And in a fleeting moment of sobriety found that Hood had acted as principle not agent as per their agreement and saw a way of getting some money back.
I think you're being a little uncharitable there. Charme also had the wool well and truly pulled over their eyes by Hood. The entire business of JDC seems to have been built on fraud.The Administrators said:
(we) have rarely, if ever, seen a fraud which is as multi-faceted or as wide-ranging as Mr. Hood's fraud is now thought to be..
Agree with both Donkey Apple and with Marks words above.
And ownership of many of the type of cars involved, gains one entry, into the £££ moneyed circles of society and the type of events that they attend, ie Good Wood etc etc.
Tuke also states something like, how the race cars are a £££ drain of money. I can only dream about how fantastic it would be, to go racing a MK1 3 Litre Capri.
And ownership of many of the type of cars involved, gains one entry, into the £££ moneyed circles of society and the type of events that they attend, ie Good Wood etc etc.
Tuke also states something like, how the race cars are a £££ drain of money. I can only dream about how fantastic it would be, to go racing a MK1 3 Litre Capri.
Gassing Station | Classic Cars and Yesterday's Heroes | Top of Page | What's New | My Stuff