News from Essex

[rstainer]

Derek Hood (JD Classics) bought an £84,000 AC Aceca (BE621) and sold it for £254,000 three weeks later. The casual observer would say that DH is either very astute or less than frank in his buyer representations. Sean Brannigan QC's assessment is blunter: "....fraudulent misrepresentation...." (5th March).

JD Classics went into administration last week (https://news.sky.com/story/classic-car-dealer-jd-races-for-funding-amid-fraud-probe-11480930). Its assets were acquired yesterday so it remains a going concern: whether Mr Brannigan's client sees any of his money (£9,000,000 is claimed) or Lloyd's recover any of their advances (said to be circa £25,000,000) only time will tell.

RS

[rstainer]

Further detail is at http://www.bailii.org/ew/cases/EWHC/QB/2018/531.html

A well-read AC aficionado is reminded of Walter Scott:
   "O, what a tangled web we weave,
         When first we practise to deceive!"

RS

[rstainer]

Your further questions answered:

Who took over JD Classics' assets on 18th September?
   Woodham Mortimer Ltd.

Is Woodham Mortimer long-established with plenty of capital?
   Not per the public record: set up earlier on the 18th September with £1 share capital allotted .

So who owns this £1 share?
   Cayman Islands based JDC Holdings LLC, resident in a Post Office box (no 39, to be precise).

But the Cayman Islands are not well known for classic car expertise. Who appears to control JDC Holdings LLC?
   Reports have it that it's HPS Investment Partners LLC (HPS being Highbridge Principal Strategies).

Highbridge in Somerset?
   No, HPS is 'headquartered in New York'.

Classic car dealers then?
   Er, no.

RS

[rsk289]

What a bizarre scenario.  Not at all familiar to readers of this forum, I'm sure...

[AC Ventura]

 My understanding is that the reason the the judgment went against JD Classics, was the aggrieved buyer (who spent £40m with JD Classics) alledged that Mr Hood acted as his his agent for the sourcing of the cars, a charge that Mr Hood unsuccessfully defended. On that basis the judge found that Mr Hood could not be acting on the buyers interest, by selling him a car that Mr Hood already owned.
It's unusual for a buyer to win this sort of action these days, where the point of law examined is a bending the truth by a classic car dealer, something the more worldly of us frankly expect. Let's hope it does some good to improve the worst elements of the classic car trade.
Incidentally, I've been a guest at an open day at JD Classic's where Derek Bell entertained us with some reflections of his career. My brother in law bought a 3.8 Mk II Jag for a (to me) crazy £120k, and with his eyes wide open. That Mk II he bought was the best on the world and a Hood gave him £50k for his old MkII.  I'm not the kind of person, who buys cars in environments like this and being in engineering all m life, I'm not easily impressed, but JD was an operation like no other. 60 employees, over a hundred cars, several million pound Cobras knocking around like they were common place. We examined a 300SL gulling, that could not feasibly been restored to a higher standard. I'm sad to see that part go, because it was unique. I'm not convinced the new owners will be there for long.

[rstainer]

I commend the Judgement (www link above) to those interested in the facts: the case doesn't concern 'an aggrieved buyer' or in any way suggest that Michael Tuke is less worldly than us.

The claim is that Derek Hood/JD Classics acted as Michael Tuke's agent in advising on Tuke's purchases and sales of classic cars. The Court concluded that the evidence presented to it was "consistent with there having been a straightforward principal/agent relationship between Mr Tuke and the Defendant by which the Defendant took a 10% commission from any profit made by Mr Tuke...."

An agent owes a fiduciary duty to his principal that excludes all self-interest; the prospect of succeeding in 'this sort of action these days' is the same as it was fifty or a hundred years ago.

RS