RF Situation - A bit of information related to other posts

[Ron Earp]

Dear Folks,

It is good that people are willing to look on the bright side of the RF situation as shown in the other posts. But I must comment, while I am happy folks wish to support RF they need to know some more of the story. Over $420,000 USD in deposits alone has gone missing - these are monies I have confirmed with owners who can prove where, when, and to whom they sent their cash. There is more money missing from investors that I don't even know to what extent, but the grand total will top over $550,000 USD in my estimation. RF makes no statement and Robert, whom I considered a friend at one time, will not take my calls or return emails. This is not a trivial sum of money nor something that has happened "over there" or something that "you heard" happen - these are real forum members, in the US/UK/Ireland, regular posters, with lots of cash that is not accounted for that was taken due to a trust relationship. My own loss is $37,000 USD, paid in full in February of 2005 but there are worse losses than my own.

I'm told by excellent sources that Camco, the SA company that was contracted by RF/Logan to build the cars, has six chassis in house and that is all. One car is basically complete and painted, the other is relatively close and needs paint, but the other four are simply chassis without bodies and without enough parts to finish them. Despite 26 confirmed RF orders with deposits ranging from $5,000USD to $60,000USD, Camco was only ever contracted, I'm told, to build eight cars by RF. Not 26 cars, and, it appears they've not even managed to build the eight they were contracted, to the fault of whom I do not know.

Eighteen of us affected have hired an attorney in Australia to investigate the situation. Yes, I agree with you dear reader, that it will net nothing, but the cost of the retainer is relatively low per person and it is better than sitting on our hands and awaiting some information. Thus far we've determined very little since Robert nor his lawyers have returned requests, so a lawsuit will be filed details of which are pending.

From the information I've gathered and confirmed by other contacts, this situation is not recoverable for RF. It is unfortunate for the GT40 community as a whole, as I wrote in the post two weeks ago when the news broke. I too, wish the situation could be resolved and everyone come away alright, but I strongly suspect that is not the way this will turn out. To think otherwise, I fear, is living in denial of the gravity of the situation.

So Pete, to answer to your question in the consumer watch section about putting it behind me - well, to an extent yes I am trying. I really hate to be involved with it, to have to post on the forum regarding the matter, and don't really wish to discuss it a lot. But it needs to be talked about because this is exactly the sort of situation a forum like this was to help prevent from happening, and happened commonly, with the kit/replica car market years ago. The names have changed and the location has varied, but it appears the song remains the same. I don't think this will be over for a long time and with the large number of people affected it will have an impact on GT40 customers and manufacturers alike.

Sincerely,
Ron

 

[Keith]

Sorry mate that is a total bummer, it seems to be worse than anybody realised and so are the implications. /ubbthreads/images/graemlins/frown.gif

 

[John B]

Robert!!!

I Know you reading these threads...One thing for sure!!!when i visit the land of Oz for vacation..I'm going to look you up and pay you a visit. We can share a couple of drinks.

Oliver

This is to you Robert!

 

Ron

This situation beggars belief. $420,000 in deposits and only 8 of the 26 orders being passed by RF Aus to Camco SA? That's a whole lot more sinister than the 'difficult trading' mentioned in other threads.

Although the guys posting messages of support for RF may not have known the full story, your initial post was pretty clear to me, and I find these messages a tad offensive to the 26 of you affected by this.

The only thing that stopped me going for the RF when the turnkey minus was announced was the bodyshape. IMHO the area between the nostril and the windscreen, so similar to the Tornado (I wonder why that was?), just does not look right. I am extremely pleased that this relatively minor point put me off the idea.

All the very best to you and all those affected. In the meantime I take my hat off to you for your continued support of the forum. Others (me included) would probably have turned there back on it by now.

Rob

 

[Pete McCluskey.]

Ron, I think you may have mis-read my post in consumer watch. I wasn't suggesting that you walk away from anything, or not do everything in your power to recover your loss. I was merely saying that when the news of RF's apparent demise was discovered you were shattered and thought your dream of owning a GT40 was over. And that it was terrific that you had bounced back to the degree that you were looking at other manufacturers and the dream is still alive.

 

[Mark Worthington]

Ron, as much as I'm a glass-half-full kind of person, I agree with you that the situation does not look good and it appears unlikely that RF has the assets or work-in-progress necessary to make the affected creditors whole in this matter. Sadly, I am also afraid that the GT40 community has lost one of its better options for a quality product and after-the-sale support.

I also considered Robert to be a friend, and, at the risk of offending some of you who now find yourselves to be RF's "creditors," I will continue to give Robert the benefit of the doubt with respect to alleged claims of his malicious or "sinister" business practices. Of course, if I am proven wrong, I will eat humble pie, grab a torch and a pitchfork, and join the rest of the affected forum members just like the villagers going after Karloff.

But this whole mess begs the question; what really happened? The general answer, of course, would be that RF was over-extended and under-capitalized. It is also probably accurate to surmise that Robert is better at engineering and customer service than he is with a balance sheet or a P&L statement. But I don’t believe it is in Robert Logan’s character to stash the money away in an offshore account or live large at the expense of his company’s finances. Robert told me that he had a decent income from his Royal Navy pension, and that his wife brought in pretty good money as a doctor, and that he therefore did not draw much of a salary from RF.

So what were the contributing factors to the RF’s financial demise? I think there were probably several, and that there may be some very interesting stories that will eventually be told in private circles – perhaps they’re being told right now. International currency moves don’t seem to have been in RF’s favor. Setting up a new venture with an entirely new set of suppliers in South Africa is most likely what pushed RF over the edge. I believe it’s more likely Robert got screwed by some of his new South African suppliers than that he was up to something sinister. Am I the only one who finds it interesting that our normally well-informed and verbose South African forum member, Andre 40, has not uttered a peep about this, nor about any of the inner goings on in SA?

 

[Tim Kay]

[ QUOTE ]
.....Am I the only one who finds it interesting that our normally well-informed and verbose South African forum member, Andre 40, has not uttered a peep about this, nor about any of the inner goings on in SA?

[/ QUOTE ]

Mark,

Well said. I have been waiting with baited breath for Andre to chime in here. If anyone has cardinal knowledge it would be Andre since Andre was involved directly with RF at the beginning of the SA move. He too must be under "gag" order /ubbthreads/images/graemlins/beat.gif It's sure to unfold at some point.

 

[Gregg]

Mark, can you tell me where you bought your rose colored eyeglasses from. I would like to see the world as you do. I am not affected by the RF situation so I have no axe to grind. You have stated that you believe that suppliers played a big part in RF's demise. I believe others have said it as well. Every time I read that statement, the question which immediately comes to my mind is, if suppliers were such a problem, and I have already collected over $400,000.00 in deposits, why not find new suppliers? I should have all that money in the bank. I am in SA in an auto manufacturing town. Wasn't his plant located in the Detroit of SA? Or why not increase production in Australia and ship over the parts necessary? Unfortunately it appears that the cars were never built and that there are no assest left. My guess, and please do not read anything into this because I have no private info coming my way, is that Robert might have initally used his used own money regarding the move to SA and placed said amounts as a loan on the books. Then when the deposits came in, he repaid his loans to the company. That may be what happened, maybe not. Please don't take this post as a personal attack on you because it is not. Just another prospective which I don't think you considered. /ubbthreads/images/graemlins/twocents.gif

 

[Mark Worthington]

Gregg, I'm not offended by your post so no worries. You ask valid questions that only Robert, and perhaps a few other individuals, can answer. The only point I was trying to make in my long-winded post was that, until we're clear on what happened, I'm going to give Robert the benefit of the doubt when forum members speculate on his alleged malicious or sinister intent in RF's financial dealings.

 

[Mike Devaney]

Qliver is hit the nail on the head, it seems to be awfully quite out there. Mike

 

[Joe T]

Is there no way some of the prospective RF owners can claim title to the 6 half or semi completed cars in SA? If they have been allocated chassis numbers to the clients this surely could be reclaimed. I know its not money back but could be better than nothing for some.

As this gets tied up in litigation the insolvency people will move swiftly to recover as much as possible from the situation. Anything left at the factory will probably be sold off for very little.

Its a sad situation, but I think if I new I had just a rolling chassis sitting in a factory in SA would have been on a plane last week. I know some will say what good would that do, but in my experience within a couple of days of first hearing of the problem you could be dealing with the issues face to face.

I nearly didnt post this but I struggle to understand since this news broke how no one has decided to go and see him?
Ross in another post mentioned the factory is still open? rent unpaid and got flack for it?

Cmon Guys,....... sounds like he was lucky it wasn't my money or Oliver's
Its the Oz GP weekend after next I wonder if he will be going??

 

[Keith]

I see the RF web site is still up and running. Is RF still accepting orders and deposit payments? Has RF instructed their agents not to accept any new orders? It is a terrable that the current customers may see a total loss of their deposits, it would be especially tragic if new customers lost their deposits knowing what we currently know.

 

[David Morton]

Also in the UK: www.thruxtonsportscars.co.uk

 

[David Morton]

Has Hershall Byrd or Rick Chattell got any information or are they Zip Lip as well?

 

[Dan W]

Hershal's last post on the forum was Jan 15th. He made 3 posts that day, one of which he offered any or all cash back to waiting customers.Since then he has been silent, over 2 months.Ron's post about RF in trouble was I think on March 8th. So lots of time in between. /ubbthreads/images/graemlins/twocents.gif

 

[Howard Jones]

It's gonna go like this.

1. Court sells everything.

2. Pay Taxes, lawyers, Administrators, court costs, county recorder/clerk fees, etc.

3. Use remaining assets to partially pay-down secured loans (banks).

Thats it.

 

[Mitch D]

Howard - you're speculation leaves out a VERY important part. Depending on the actions of the directors of the company, PERSONAL ASSETS of the directors can be targeted too. Thus, for example if it is found that Robert was 'trading while insolvent' then assets of the directors are suitable targets for the creditors. And on top of that, putting something in a spouses's name doesn't mean it's not within reach - there is the concept of 'community property' to consider too.

Bottom line, the battle will not be a quick one, but I'm willing to bet the people affected have the capability and resolve to grind away for a long time and as necessary to the bitter end. Think about it, people that pony up $25-75k (USD) for what is essentially a "luxury" or "toy" have some considerable resources of their own. When united and determined, a group of such people will be a formidable foe. Anyone who doesn't acknowlege this fact is a fool or arrogant or both.

We're only at the beginning now folks, so brace yourselves for a heck of a ride.

Mitch D

 

[Howard Jones]

Mitch, You are right about it taking a long time to sort out. It will.

The other thing is if there are enough liquid assets to make good on secured loans then usually the company in question will "reorganize" and emerge from BK. If on the other hand the company doesn't have the ability the bridge the crises and the banks won't cooperate then the company usually goes under. Since the banks can't be paid off in full most of the assets will be used to partially pay down those loans leaving nothing for other interested parties.

I am not sure if deposits for the contracts with customers for products fall into the secured category but I still think the banks will come first.

Now you bring up a good point about "shielded" assets. I.E. the wife's house, business, community properties, homesteaded residents, etc. If any of these can be included in the settlement and they are of sufficient amounts then they will be applied to secured loans until they are made whole and then other owed parties may be paid as the court directs from the remaining monies.

The trick is to uncover "other" assets and get the court to include them in the matter.

In any case, again you are correct that this will take some time. In Calif we would be talking years.

Think bulldog after a pork-chop.

The hope would be that justice would be complete for all concerned.

 

[John B]

Are future assets untouchable? Lets say he wins the lottery or ventures into a new company and is profitable. Just wondering.

Oliver

 

[Ron Earp]

Howard,

there are VERY few secured loans on the sheet, the largest is $27k Australian for taxes. By far, the largest group of creditors is the folks that put in the deposits - the customers. No dealers, banks, or other such parties have put in claims.

Ron