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After they have gone into Administration again, with many losing out but they are still very much in business. The auction house equivalent of Specialist Cars of Malton...
https://www.prewarcar.com/the-crooks-of-coys-a-truly-new-beginning
Do you remember hearing stories about the British auction house Coys? About its grand history? About its demise? About how the owner of the company was arrested by the German Police at the Techno Classica show? And how the company went into administration, leaving many car owners without their car or their money? And how the company started afresh?
Recently, we received the message that auction house Coys got new ownership and management. The company that started in 1919 has a rich and grand history; however, in recent years the stories about them were – to put it mildly - less positive.
The last month, we spoke to several people who claimed to have fallen victim of their alleged criminal activities, and we looked further into details of the administration. We also spoke to Nick Wells, the new MD of the firm, but who also had been working for the auction house in the past. The question we asked ourselves: what to make of the new Coys?
History
In 1919, the Coys name was first seen in the streets of London. At a certain moment, the company - at that time an antique dealer - was bought by Charles Howard. He was a true car enthusiast, as well as a true tradesman. He earned his success in buying and selling classic cars under the Coys name. In 1981, Jeffrey Pattinson took over the firm, and together with Douglas Jamieson, Coys remained one of the leading auction firms and the company gained a top-notch reputation. Many - now well -respected classic car dealers - started their career (working) with Coys.
In February 2003, Coys experienced a management buyout and a new firm called Coys Limited (later on Coys of Kensington Automobiles Ltd) was founded with Chris Routledge and Douglas Jamieson acting as directors. In March 2004, Coys of Kensington Automobiles Ltd went into administration and £1.65m vanished, leaving 33 creditors with empty hands. A new company, Coys of Kensington Ltd, was formed buying the assets and goodwill and using the same name, address, and activities - successfully auctioning and selling cars. Once again, Chris Routlegde and Douglas Jamieson acted as the company's directors. Jamieson left the company around 2010.
Even though the company had the same owners as before, this time things seemed to be going well (again) for Coys. Of course, there were a couple of complaints (common to almost every business), but most of the reviews were positive. Yet the tide turned. In 2012, one seller complained to the Advertising Standards Authority (ASA); stating that Coys was using 'since 1919' in their advertisements and he felt he was being misled. In reaction, the ASA stated that the claims "founded 1919" and "since 1919" were unsubstantiated, and as such be construed as misleading.
In September 2017, we ourselves experienced first-hand the difficulty of doing business with Coys. We had sent Coys an invoice for advertising (as agreed on) and they did not follow up on the money. After costly legal action and a great deal of effort from our side, we did receive the money in the end. Others were, unfortunately, less successful.
A Ponzi-Scheme
According to the several sources we spoke to, Coys was going from auction to auction, trying to pay previous sellers with the money from the next one. Needless to say, this so-called Ponzi scheme is clearly not a healthy or satisfying way to do business. And then Covid-19 made things even worse.
On April 17, 2020, Coys of Kensington Ltd, with directors Chris Routlegde and Ben Manch, (once again) went into administration, leaving numerous people with empty hands - a total of 95 creditors, adding up to a total sum of at least £5.856.897,30. Among the deceived were people who sold their cars at Coys auctions, even as the Coys directors had known at the time of the auction that it had been insolvent.
In reviewing the administration report, one thing becomes clear. The company has been in an insolvent situation for a longer period of time. The company has been having difficulties since 2017, when several legal proceedings were instituted. According to the report, the legal claims concerned a number of issues, such as about the title to the vehicles, vehicles sold without the necessary authorisation, and vehicles being sold at a lower value than the consigner had agreed to (to put it plainly: criminal activities!). These ongoing legal disputes and a downward trend in sales impacted Coys' cash flow significantly, which ultimately led to the company going into administration.
We were wondering if there is still money to pay the creditors? The answer is ambiguous: it is a yes and a no. According to the report, the company still has around £150.000 at the bank and in cash. However, the exact amount remains unclear as the accounts were foreign currency accounts. Besides, there is mention of a director's loan of around £230.000, which will only be reimbursed if the directors are able and willing to do so. Even if there are still some book debts and assets to sell, the administrators must be paid too. As the situation now stands, it seems that the creditors will be left empty-handed (this was also confirmed by the administrators). A staggering amount of almost £6 million evaporated.
In prison in Germany
The administration report mentions numerous legal claims brought against Coys. In 2019, one of these claims led to the ill-famed moment when then-director Chris Routledge was taken away in handcuffs by German policemen at the Techno Classica show.
Via one of our contacts (an insider), we got hold of the whole story. He told us the following: 'A German collector sold his Miura at a Coys Monaco auction. The new buyer paid the selling price right there and then. However, Coys refused to pay the seller directly, claiming an administrative issue. They said that there was an issue with the papers. Coys' agent picked up the paperwork at the seller, yet Coys later claimed that they didn't receive any of the paperwork. A year later, the seller still had not received the money. He sent a representative to the Coys' office in London, who learned that the company didn't have the money to pay the seller. Instead, they inquired whether the seller would accept a Porsche 959 as compensation for the money lost. The seller agreed (as it was better than nothing). Chris Routledge assured the seller that Coys owned the Porsche and a deal was made. The car went to the seller's garage in Germany, but within a week, the car was seized by German police. It turned out that the car did not belong, nor had ever belonged to Coys at all. It belonged to a German garage.
The seller was back at square one. He started to despair if he would ever get his money back and decided to enter into legal proceedings. This led to German police showing up at the start of the Coys Techno Classica auction, marching up to Routledge (who was standing on the auction rostrum), leading him away with a pair of silver bracelets on – traditionally worn with one's hands tied behind one's back. The Miura money was paid up the next day"
This story is similar to numerous other stories that we heard. Strikingly, one of the most repeated stories that we heard were about the constant use of excuses. Coys came up with excuse after excuse as to not pay the seller: the CEO must sign the check and he is not in the office; he is on annual leave; the accountant is on annual leave, etcetera etcetera. One of our contacts told he went to their showroom because he didn't get paid in time after selling some automobile-items via Coys. When he arrived at the showroom, they told him that the person who needed to sign his check wasn't in the office at present. Our contact told them that he would wait for him, and so he did. After a few hours of waiting, the person was suddenly available and our contact was successful in receiving his money.
Another story that we heard of was of a person who blocked Coys' gate with his truck, just before Coys wanted to transfer the cars for the upcoming auction. Needless to say, he got his money quickly.
It almost sounds like an old gangster film and, of course, this is by all means not a way to do business. How is it possible that these fraudulent deals continued to happen and that these crooks were able to continue doing business? It wasn't just one disgruntled client; it seems to be part of a pattern. We heard similar stories countless of times.
We heard about stories from buyers who thought to be in luck and purchased a car via a Coys' auction, and who were later visited by police as it turned out that the seller reported the car as stolen since Coys didn't pay the seller and sold the car for far less than the agreed reserve price.
Or those who weren't able to attend the auction themselves and did receive the money that -according to Coys -was the selling price. Only later to find out it was a fraction of the actual selling price. These aren't just rumours that are going around, we actually spoke to several people who are on the creditors list. They received written proof of their legal claims, as well as a High Court order ordering Coys to reimburse them pre-dating the Administration.
One of the creditors wanted to sell their Bugatti Type 37 via Coys, as they promised that they had a potential client for the car. The seller received a deposit and waited for the final payment. They received no money and, according to Coys, there was no deal yet. However, the seller then saw photographs of his car ... participating in the Mille Miglia with the so-called 'buyer'. Apparently, Coys falsified their signature and the car was 'sold" – without their approval or knowledge. Although their claim was accepted by the High Court, they are now listed as merely 'normal' creditors. Left empty-handed, without any money for their retirement, and without their own car. Please find the whole story here.
The Ponzi scheme became even more problematic when Covid-19 came around. In order to pay old expenses with new income, you need a regular flow of money. One classic car dealer had a car for sale and Coys said they had a buyer. The client and Coys met at Coys' London showroom and a deal was arranged. Coys explicit asked the buyer to transfer the full amount to their account. The willing buyer did as asked; however, the money wasn't forwarded to the actual seller. Consultant Nick Wells came up with excuses and Chris Routledge refused to answer any calls. A few days later, their showroom was closed down due to Covid. Shortly after, the company went in administration. Alas, no money for the seller and no car for the buyer. The car is held in escrow, where it currently remains. Even if he was closing this deal, it seemed that Chris Routledge was fully aware of the company's situation and was already seeking legal advice as he intended to go in administration (once again).
The next chapter
We now turn to page to the next chapter of the Tale of (De)coys. In June 2020, a new company called Coys of London Automobiles Ltd was founded. The company's director is Richard Calleri of GEOLOG and its shareholder is a Luxembourg-based investment firm called Kamri Invest. The company will use the same name and showroom, yet there will be many changes.
A new company cannot be held responsible for any (wrongful) actions by its predecessor. It has the opportunity to start afresh and operate as a whole new company. A new start with a brand-new staff. Brand-new though? In last week's press-release, we came across a familiar name: Mr. Nick Wells. According to the press-release, Nick and his team will be running the company from now on.
For some, it might come as a surprise that Nick Wells has been appointed as the director of the auction house. Although he has much experience in marketing and in the classic car business, he was also involved with the former's criminal activities and many hold him responsible for the loss of money or car. So the question remains: what to make of Mr. Wells? Is he a crook himself, or has he fallen victim to the actions of this former employer? Some of our contacts have attested that Mr. Wells was the one that advised them to sell their cars via Coys, only to come up with excuses afterwards.
Nick has actually never been officially employed by Coys of Kensington Ltd. He worked as a consultant and can most likely not be held legally accountable for the criminal activities of the actions of both Coys or Chris Routledge. His name even appears on the list of creditors, as he filed a claim against the old limited.
In order to get to the bottom of the situation, we reached out to Nick and we discussed the new and old Coys. After speaking with Nick, we had the feeling that he truly has the best intentions to conduct business in a legitimate manner. According to Nick; "Coys genuinely have turned a corner now and we absolutely will put our clients in the centre of the business from now on". Even though the 'old company' itself definitely can be considered fraudulent, a few questions do spring to mind about Nick's role herein. It was clear that there was a lack of funds to finance all transactions and it looked like the people of Coys were living the high life while successfully pretending to be a trustworthy business. If he had known about these fraudulent activities at the time, would he have tried to make a deal with a client just before the company went into administration? He clearly must have known that he would not receive any money himself(his fee) and that he would lose all credibility and that he most likely would never be trusted again in the (small) classic car world.
So where does that leave Coys now? For the moment, we think we should give the new company the benefit of the doubt. Of course, we will keep a close eye on their next auctions and their actions.
The new owner GEOLOG has an excellent reputation and, not unimportant, very deep pockets. On their website, it is stated that the company is strongly committed to the highest ethical and legal standards and fully complies with the generally accepted anti-corruption and anti-bribery business principles. This doesn't make things easier or better for those who lost their money and it doesn't make the lying and fraud acceptable in any way.
And what to make of the new director? We aren't sure. Nick might have been a crook himself, or he hadn't been capable to stand up to the directors at that time. We realise that this view might be considered by some to be a bit far-fetched, or rather naà¯ve but that is up to you and the new clients; yet, we feel that the dealings of the previous owner cannot be blamed on the new owner. If the new owners and the new director intend to keep their promises and they follow the path of honesty and integrity, they might find trust, legitimacy, and success again.
Let us all hope that the new management and owners are able to bring back the good old days of the Coys' auction house. And in order to start with a clean slate, let us hope that they can assist the victims of the old Coys in getting their cars and their money back.
