Paul Hynes SR7 and SR4 Build Calendar Thread

[RedundantSoul]

What an interesting thread and so good to see all the concern for the honourable Paul Hynes who chose to close his company Paul Hynes Design Ltd. Not so much sympathy for the 5 staff who turned up as normal for work on Tuesday 5th May only for an email to arrive from Paul Hynes to inform them that he was in contact with Insolvency Practitioner to liquidate the company.  Business was to close immediately and no one allowed back on the premises but Paul Hynes as Sole Director/Owner.  Despite staff requesting a face to face meeting with Paul Hynes to discuss options, he had made his decision and refused to come into the premises and face staff. Isn’t that a great way to reward the loyalty and hard work of staff that had produced and shipped over 200 orders in the last year.  All shipments arrived safely with customers,  and if  any ‘lost’ by the chosen carrier were immediately replaced by PHD Ltd.

 

The financial position of Paul Hynes Design Ltd was untenable  due to the honourable Director withdrawing working capital on a monthly basis, despite being on the business payroll as Technical Adviser. This accrual of Director’s Loan finally left the business without the cashflow to cover overheads, something the honourable Paul Hynes was well aware of throughout the lifetime of PHD Ltd.  Despite not knowing if the May payroll costs could be met, the staff were willing to work on and complete the 12 outstanding customer orders, but this offer was withdrawn once it became clear that Paul Hynes did not have the decency to come into the premises and talk to them in person.  

 

Company assets will cover all creditors if Paul Hynes is honest with liquidator but whether this will happen is debatable.  Of course the honourable Paul Hynes will continue to trade, offering bespoke units to customers ahead of all the custom build orders. Anything to keep his personal funds flowing and more fool the ones who part with their hard earned cash for a slim chance of actually receiving their order.

[R1200CL]

@RedundantSoul

Thanks for sharing this information. It’s good to have another version of the truth 😀

 

So @paulhynes was actually the owner of this company ? He didn’t license his technology to another person ? That was my previous understanding. 

[JonD]

The statement from @RedundantSoul aligns with a number of other facts and I will not be prepared to just let this go. If Hynes has been taking money out of the company either through loans or as dividends and running it into the ground, then its well worth a legal case against him.

 

The guy sounds pretty dishonest and the evidence unfortunately is pointing to that as well.

[internethandle]

Would be good to see how RedundantSoul is privy to such information. I may attempt to get in contact with Stephen to see if he is willing to confirm or deny any of its content. Hard to have 100% confidence in one anonymous post by a new user formatted in such a way. 

 

I, for one, do not understand the insinuation that there isn’t anyone in the thread with any concern for the staff of PHD Ltd. and the thread is only shilling for Paul Hynes or some such nonsense  - there have been multiple mentions of Stephen in the thread already. 

[auricgoldfinger]

2 hours ago, internethandle said:

Would be good to see how RedundantSoul is privy to such information. I may attempt to get in contact with Stephen to see if he is willing to confirm or deny any of its content. Hard to have 100% confidence in one anonymous post by a new user formatted in such a way. 

 

I, for one, do not understand the insinuation that there isn’t anyone in the thread with any concern for the staff of PHD Ltd. and the thread is only shilling for Paul Hynes or some such nonsense  - there have been multiple mentions of Stephen in the thread already. 

 

There is a good chance we will hear from Stephen on this thread in the coming days.  He has privately confirmed the information RedundantSoul has shared, and more. 

 

[internethandle]

What a shame. Hard not to be angry with Paul, then - I feel a great affinity for Stephen, as I intimated earlier in the thread. Paul certainly has made his own bed and must lie in it if that's the case. 

 

Best wishes to Stephen and the others at PHD Ltd. effected by this terrible turn of events. To seemingly weather the global events of the last year only to have things come crashing down suddenly due to mismanagement and unscrupulousness just as it seemed things may be returning to 'normal' in some parts of the world would just add insult to injury.

 

 

 

 

[The Computer Audiophile]

It would be great if the employees could carry on with a new company. Perhaps outsource design to a few well known engineers and be the team that assembled and supports the PSUs. 

[Johnseye]

It is very disappointing to read this news.  I was fortunate to get a custom SR7 before the queue built into years of waiting instead of months, and fortunate to get a couple SR4T's.  These are truly top of the line supplies.

 

I always felt it was risky putting money down on a product you knew you were waiting at least a year for.  Throw in the continued health issues publicly shared by Paul, as well as other excuse stories about why delays were occurring and you had to know your money was at risk.  But it was the best supply out there so people took the risk.  I was very tempted multiple times even to the point of specing out a supply with Paul.  This was before he stopped custom orders.   I was afraid something like this would happen.  Hopefully he'll still fulfil the outstanding custom orders, but I would expect after this there won't be any new business.

 

When PHD came around it felt more like a retail organization you could trust.  Products getting delivered in weeks or months.  I was getting ready to buy one or two more.  This company could have profited with the reputation Paul had built.  Now to know he milked the cow to death.  So sad.  And those people who relied on PHD for employment...

[paulhynes]

One of the documents I was asked to prepare by the Insolvency Practitioner is a brief history of the PHD Ltd company from early preparation onwards. I have not finished it yet but as this thread is rapidly turning into a witch hunt I might as well post a copy of the document as it covers the general details. I will also post a short explanation of why the company was closed.

 

I have appointed a professional licensed Insolvency Practitioner rather than a quick fix, get you though the process without any hassles, fly by night operation, to ensure there is no impropriety in the proceedings. If any creditor has any questions about the closure you will need to address them to the Insolvency Practitioner once he has contacted you regarding the liquidation.

 

Local employment project history.

 

The local employment project started 5 years ago when I first contacted the local enterprise agencies for advice regarding setting up the project and for information about financial support packages.

 

The project was initially envisaged as being either a workers cooperative of a community interest company. It was designed to be an autonomous manufacturing facility to help support local employment opportunities in an area designated as a deprived economic area.

 

Two sources of support funding were identified, one being the Leader European fund and the other being the local community land owner Storas Uhibist. The proposal attracted in principal support up 50% of start up costs from each fund.

 

Much preparation work was required to provide the documentation for the project plan. A series of meetings with the local enterprise agencies, Internet business advisors and a local accountant provided the guidance for preparing the business plan. I was advised that all expenses should be entered into the cash flow projections and this could include a basic remuneration for myself although it would likely have to be deferred until such time as the business sales revenue could support the realisation of the deferred earnings.

 

The plan was proceeding well until the advent of the Brexit Referendum. The vote to leave the EU caused changes in the support qualifications for Leader funding and their proposed support level dropped from 50% down to 30%. This required a search to replace the lost 20% of the funding package and a rework of the business plan and cash flow projections. Then 2 months later Leader withdrew all support and the project finance package required reappraisal again. Not long after this Storas Uhibist also withdrew from the funding businesses as they were short on funds for local investment and with no support funding the project was on hold while other options were considered.

 

It occurred to me that a revenue stream would help start the project on a smaller scale than originally envisaged and that a slow progressive expansion should be possible with sales revenue. So I decided to re-start my old custom build service to use some of my earnings from this to fund the production engineering of a product to start the revenue stream. I then designed the SR4 to provide the revenue stream for PHD Ltd. Premises were sought and a lease acquired two and a half years ago starting 01/12/2018. The office and workshop workstations were custom built to suit the production environment. Once the installation was completed an office administrator was employed early in 2019. At this point I was ready to set up either the workers cooperative or a community interest company but as I looked into this further I realised that it may be better to wait for additional staff to be employed first. The project needed a business account and as I had been advised that a limited company would be a suitable temporary vehicle initially the company Paul Hynes Design Ltd was formed with a view to converting it to a workers cooperative or a community interest company at a later date.

 

At this point, because there were no management staff appointed I ended up becoming the director by default, but it was not my intention to become permanently embedded within the company. The company was intended to operate autonomously, as soon as suitable staff were employed, with me just providing technical advice.

 

All through the preparation prior to forming the company I chose to defer reimbursement of setup expenses and wages and I also chose to defer my salary during the first company trading year to help the company cash flow remain positive. However I did draw some setup expenses in the first year but only having first checked the cash flow was sufficient to cover customer order materials costs and operating costs.

 

In June 2019 Stephen who I knew from his work as assistant manager at the local coop food store had heard about the progression of the project from one of the part time staff and he expressed an interest in joining the company. As he was good with customers and had management experience I was keen to see him join the team and he proved to be first class as the production Manager. As the office administrator was not comfortable handling customer enquiries and sales, Stephen volunteered to take this task on board and proved excellent at this too. As Stephen progressed I recognised that he was eminently qualified to take an executive roll in the company and offered him the position of Managing Director and a shareholding in the company. This would suit me very well as I could then resign as a director. He was keen to pursue this but we were advised by the company accountant that the share value of the company was at the time unknown as the first year’s accounts were yet to be prepared to assess share value. The executive position was placed on hold until the share value was known. Unfortunately, due to covid related delays and some technical issues, the accounts were not ready until this year.

 

Sales during 2020 were continuing well and I chose to reimburse some of my earlier deferred wages and salary but only after checking the cash flow prior to making a drawing. Cash flow can be variable for a variety of reasons so when informed that the cash flow was slow I reduced and then stopped reimbursing deferred wages/salary to ensure that operating costs and staff wages were covered.

 

 

Sales over the last few months have been slowing and there are a number of cumulative reasons that can be fairly attributed to eventual seizure of the cash flow at the end of April.

 

1)     Covid-19 initially kept many people isolated at home leading to greater interest in home entertainment, which resulted in steadily improving sales. This has been an ongoing situation with stop-start lockdowns occurring and with the advent of vaccine roll-out and the possibility of imminent lockdown relaxation and the imminent arrival of the summer season, many potential customers are likely thinking about taking a much needed holiday instead of spending their money on home entertainment.

2)     Materials and electronic components have become harder to source which affects production schedules so stock levels had to be increased where possible to ensure can keep production schedule active. This higher level of stock holding costs considerably more money to support in the short term until supplies can resume a more normal availability.

3)     Now that Brexit has been activated the delays with shipping to the EU have been discouraging customers from ordering and this has been a significant loss of revenue.

4)     Increased activity in the power supply market by new and established businesses has likely reduced potential PHD Ltd sales.

 

 

Paul

[paulhynes]

Why the company had to be closed.

 

When it was apparent that the cash flow was not enough to pay all the wages on 25^th of April, the office manageress offered to defer her wage until there were funds in the account and I deferred half my salary for the month until she had been paid. I never received the balance due to the company closure. The rest of the staff were paid as was the office manageress shortly afterwards.

 

28^th April – Stephen informed me that sales had seriously slumped and with little working capital and virtually no access to finance, he was very concerned about the situation. Stephen also stated that as it was unpredictable how long the financial slump would last, both he and the office manageress were considering leaving the company if there was no prospect of wages the following month.

 

4^th May – My e-mail to the office manageress :-

 

I want to hold a management meeting early next week, either Monday 10th

or Tuesday 11th, circa 1pm onwards at Yours and Stephens convenience, to

assess the current PHD Ltd financial position and go through any options

that appear viable. Having the meeting next week will give time to

accumulate any relevant information we will require at the meeting.

I will need details of the current financial position regarding cash in

the bank and paypal accounts, as well as outstanding financial

commitments on the day of the meeting.

 

I will also need details of any options thought to be viable by you and

Stephen by e-mail on Friday 7th May.

 

Stephen raised some points in his last e-mail that I feel I answered

sufficiently in my reply to his e-mail However there may be a number of

issues that need clarification regarding the future of the business. I

will expect a synopsis of any points he wishes to raise at the meeting

by this coming Friday (7th) via e-mail, to allow myself time before the

meeting to consider any subjects he wishes to discuss.

 

If there are any problems regarding the scheduling of the meeting please

advise me of a suitable alternative time.

 

Regards

Paul

 

4^th May – I was informed by the office manageress that as there was only just over £400 in the company account, and direct debits were due for payment within 5 working days, there was no possibility of continuing without either additional sales or additional funding. She and Stephen both agreed that the company was unable to cover working, business and employment costs for the remaining month and that in their opinion the company was no longer viable. She also suggested a meeting immediately or at the latest the following day.

 

Given this information, and that staff were already considering leaving, I also concluded that the company was insolvent and decided that it was more important to spend time seeking advice for possible solutions, or in the absence of a solution, advice on how the company should be closed to comply with company law, than have a meeting with no solutions on the table.

 

I was able to get a telephone appointment with a professional licensed Insolvency Practitioner the following morning and after running through the situation I was advised that the company was insolvent and should cease trading with immediate effect. The Insolvency Practitioner duly sent the contract of engagement documents which I signed and returned. I was instructed that they would deal with everything regarding the company closure and my responsibility was only to provide whatever documentation and information they requested. I have asked the person handling the closure for permission to post a notice with their contact details on this forum thread as I do not want to pre-empt their procedures. She is away on business and not back in the office until Tuesday. If they are happy to allow the post then I will post the contact details as soon as I receive the permission.

 

I also telephoned CMSCo accountants and informed them of the PHD Ltd insolvency and imminent liquidation.

 

Paul

[JonD]

Nothing about the staff being furloughed; that would have taken a lot of pressure off the company cashflow. This was widely available to small businesses in the UK.

 

 

[paulhynes]

Two of the staff were furloughed early on in the pandemic.

 

Just prior to closing the company, in view of the fact that furlough support was still in place, at least until the autumn, I suggested to the office manageress that I be placed on furlough, as an overhead saving measure. There was a question mark over whether that would be workable and it would not have saved anywhere near enough overhead on its own.

 

Alongside this, in an effort to save the company, I also suggested that the staff seek enterprise agency support to take over the company, as this was the original plan anyway. I was happy to transfer ownership but after a staff meeting this suggestion was declined.

 

Paul

[RedundantSoul]

What a kind offer and how on earth could staff decline it! Could it have something to do with the ‘nominal fee’ Paul Hynes asked for; or the continuing remuneration for sporadic technical  support; or the Bounce Back Loan of £25,000 which would need to be repaid from June 2021; or could it possibly be because the staff would inherit the outstanding Directors Loan of over £20,000???

[JonD]

I would love to get hold of the financials from PHD Ltd. I am a qualified accountant, have run my own Ltd company before, have audited etc... 

 

Honestly, its a cash up front business, its not hard to work out if its running out of money... Selling more PSUs when you are close to running out of cash, is basically borrowing from Peter to pay Paul... You kick the can down the road, but unless you are making some serious profit on each item sold and are seeing a healthy order book, all you are doing is shafting the new customers... For a small business its really isn't hard to keep on top of the finances. The accountants provide the software to do this for you. Just upload your invoices, log your staff, put in costs etc... Mine cost me £150 a month.

 

The £20k needs to be repaid if there is an outstanding directors loan. Its separate from salary. Dividend payments will also need looked at. How would you justify paying a dividend when the company is running out of cash.

 

 

 

[Qhwoeprktiyns]

Discussing all this on a public forum seems really inappropriate.

[IRS2092]

I am super lucky that I didn't place my order with PHD, thank god that I found better solution and way cheaper.

 

Thats why Stephan asked if I needed to order the supply or not month ago, it pretty strange from PHD to ask customers such questions.

 

They even don't answer any email as we saw previously.

 

Its good to know this story, and this story should have finished long time ago.

 

Long waiting, very expensive for no reason, no responsiveness and bad communications, people suffering, no refund.

 

 

 

 

[your momo]

It depends if this permits to spill out the truth regarding how all outstanding paid in advance orders will get fulfilled.

 

Also how come a Ltd company can use "paid in advance business model" if build through "bridging loan" which can get retrieved at any time by the sole company owner ?

[Qhwoeprktiyns]

17 minutes ago, your momo said:

It depends if this permits to spill out the truth regarding how all outstanding paid in advance orders will get fulfilled.

 

Also how come a Ltd company can use "paid in advance business model" if build through "bridging loan" which can get retrieved at any time by the sole company owner ?

 

This is going far beyond that. Grievances between various actors in the company are none of our business, and should be discussed between interested parties and not laid out for public view. The turn this has taken here is a little shocking IMO. 

[IRS2092]

I have another idea for PH himself.

 

Rather than telling us your story and your reasons, go and refund those who paid in advance I am sure they are not interested into your story anymore.

 

Sell your car or your house, then do whatever it takes internally to solve your internal problems.

 

 

Thank you PH

 

 

[BigAlMc]

21 minutes ago, IRS2092 said:

I have another idea for PH himself.

 

Rather than telling us your story and your reasons, go and refund those who paid in advance I am sure they are not interested into your story anymore.

 

Sell your car or your house, then do whatever it takes internally to solve your internal problems.

 

 

Thank you PH

 

 

 

If this and your previous post are your tone when you didn't place an order and don't have any money at risk then I dread to think what you'd post if you had some skin in the game 🙄

 

1 hour ago, IRS2092 said:

thank god that I found better solution and way cheaper.

 

Do tell. You either learned a lesson most of us constantly fail to learn (just enjoy the music and stop fretting about "better") or you stumbled on the holy grail. Better than the best LPSU on the market and way cheaper! Impressive stuff.

[IRS2092]

7 minutes ago, BigAlMc said:

 

If this and your previous post are your tone when you didn't place an order and don't have any money at risk then I dread to think what you'd post if you had some skin in the game 🙄

 

 

Do tell. You either learned a lesson most of us constantly fail to learn (just enjoy the music and stop fretting about "better") or you stumbled on the holy grail. Better than the best LPSU on the market and way cheaper! Impressive stuff.

What game?

 

Dont pay too much attention to my posts.

 

Pay attention to the story, and to the people money involved.

 

200 orders means serious money is there that vanished in a year

 

good luck

[JonD]

@hopkins I do think that a lot of extra information has been disclosed on this incident, plus some speculation; but don't forget that this really began to kick off when PaulHynes version of events started to get responded to by various people on the other side of the story who were seeing it quite differently.

 

Ideally PHD Ltd would have announced it was closed and going into liquidation on its own website and Paul would only have needed to link to that and let ppl know what is going on. Instead we got his version of events and that has led to the long conversation and I notice that there is still no official communication from the liquidators to anyone and nothing on the website about the problem.

[Darryl R]

6 hours ago, JonD said:

@hopkins I do think that a lot of extra information has been disclosed on this incident, plus some speculation; but don't forget that this really began to kick off when PaulHynes version of events started to get responded to by various people on the other side of the story who were seeing it quite differently.

 

Ideally PHD Ltd would have announced it was closed and going into liquidation on its own website and Paul would only have needed to link to that and let ppl know what is going on. Instead we got his version of events and that has led to the long conversation and I notice that there is still no official communication from the liquidators to anyone and nothing on the website about the problem.

 

Very much in keeping with the subject of this thread, let's also remember this is the same individual who has taken thousands of dollars from customers of his "custom business," and has yet to honor some of those orders for up to 4 years!  None of this should come as a surprise (I speak as one with an outstanding PHD order).

[auricgoldfinger]

59 minutes ago, Darryl R said:

 

Very much in keeping with the subject of this thread, let's also remember this is the same individual who has taken thousands of dollars from customers of his "custom business," and has yet to honor some of those orders for up to 4 years!  None of this should come as a surprise (I speak as one with an outstanding PHD order).

 

Conservatively, something north of $100,000 in unfulfilled custom build orders. 

[auricgoldfinger]

On 5/15/2021 at 4:45 AM, JonD said:

I think I will get in contact (next week) with the accountants who prepared his only set of filed micro accounts and see if they are aware of the company going into liquidation. (Contact Campbell Stewart MacLennan (csmco.net))

 

Might be worth others doing the same thing.

 

When i liquidated my personal company that i used for contract work, my accountants recommended the liquidation specialists. But due to the COVID situation in the UK, the liquation process, which is normally around 6months for a simple liquidation, has now pushed passed 15months... Delays with HMRC (uk government tax dept)

 

Did you ever have a chance to contact the accountants?  Is there a way to find out who is in charge of the liquidation process?  I see the PHD website is still live with no mention of the insolvency.