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

Why the company had to be closed. When it was apparent that the cash flow was not enough to pay all the wages on 25th 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. 28th 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. 4th 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 4th 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

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

Hello Brian, Under the circumstances I will no longer have access to the new unit in Lochboisdale so I am returning the Custom Build stock and equipment back to my home address. I will have to remove an old large thermal store that is no longer used from the laundry room which will create space to store much of the custom build stock and equipment that was crowding me out in the storeroom. I should then have enough room to work on chassis safely and carefully. Hello Iving, I am pleased you like the SR7T. At this point in time I have only two priorities. Firstly, there is much work to complete preparing the documentary information requested by the Insolvency Practitioners. Secondly, I have to get the Custom Build schedule back on track and all orders completed. I currently have no plans to make the standard SR4, SR5 and SR7 product range I licensed to PHD Ltd available again but may reconsider this once I have completed the custom builds. I will attempt to get the website taken down as soon as I come up for air. It will demand some care as the last time the first employee of PHD Ltd removed the website it took all the e-mail addresses with it and caused chaos for a while. As I am not a website designer I will have to proceed with caution. Hello ASRMichael, Thank you for your suggestions. I have been notified by the Insolvency Practitioner that they will handle everything to do with the liquidation and I have to follow their instructions. I will contact the Insolvency Practitioner and clear this before posting their contact details as I do not want to pre-empt their process. I also will give them the AS forum thread link and they can post the contact details if they prefer to do it this way. Hello Alan, Very sad news and I wish it were different. Stephen has been first class since joining the company. Egill23, I will see if I can find details of the delivery issue when I am next in the office to access the computers. Hello Daryl, I am sorry you have been caught up with the closure of PHD Ltd. The sudden insolvency position only became apparent on 28th April. Prior to that date the company was able to pay bills and wages from cash flow as usual. The office manageress and I both spent much time looking for financial options to support the business until 4th May when a financial analysis highlighted the insolvent position. Alongside the search for funding I sought professional advice on how to deal with the situation and when it became clear that it would not be possible to find support funding I approached the Insolvency Practitioner for advice and was advised that, as the company was insolvent, the law states it must be liquidated. I am afraid this is not a façade and I do not make the laws in the UK but I must abide by them. The company laws in the USA may have different regulations but PHD Ltd is in the UK so the local laws apply. Once I was aware of the position of the company I closed the doors and instructed staff not to accept any more customer orders or add any more expenditure, in accordance with the insolvency regulations. I immediately followed his instructions and closed the company. I have checked the company bank account and your order payments to PHD Ltd were made before the liquidity situation became apparent. This means that you are now a creditor of the company within the liquidation proceedings. Unfortunately PHD Ltd is not allowed by law to give individual liquidation creditors priority so cannot issue a refund. Your details will be given to the liquidator and funds left after liquidation will be shared with the creditors. I am afraid this is entirely out of my hands. Regards Paul

Unfortunately PHD Ltd is indeed now closed because of insolvency due to recent adverse trading conditions, leaving the company unable to cover this month’s operating costs. Because this is a limited company and it is a separate legal entity, I have to follow strict legal guidelines defined by Companies House and I am currently responsible for liaising with the insolvency practitioner appointed to close the company down and to provide all the information they require to complete their task. The Insolvency practitioner will, in due course, contact anyone with a creditor interest in the company. My custom build outstanding order schedule is not part of the insolvency proceedings as it was never incorporated into the PHD Ltd company. The only effect the PHD Ltd closure will have on the custom build schedule is absorbing my time over the next few weeks while I comply withy the statutory closure data provision requirements. Once clear of my legal obligations with the Insolvency Practitioner I will continue with the custom build schedule as soon as possible. My e-mail in box is rather overloaded at present so please do not expect an instant reply. I will answer the e-mail as soon as I can. I am sorry to be the bearer of such sad tidings. Regards Paul

Hello b This is off topic on Nenon's thread and questions like this would be better posted in the SR7 thread. Perhaps Chris could move this to a more appropriate thread. I have been considering this but it would cause a conflict of interest between PHD Ltd and my custom build schedule which are two entirely separate business activities. Regards Paul

Hi Brian, The home workshop is now operational. Space is somewhat limited and I have no idea how I have managed to get so much equipment and materials in such a small space but it is workable for assembly work. Unfortunately there is no room to re-instate my machine shop here so I am having to rely on PHD Ltd to handle the machining requirements of the chassis etc. I am currently rebuilding a couple of SR7 repairs that have been hanging around since before the Covid lockdown and I started build 20 but have placed this on hold pending communication with the build owner. I have temporarily moved on to build 21 pending a reply from build 20. I have had my first Astra Zeneca Vaccination but the second one is not likely before May, so I will be working from home for a while. Working in such a small space has its limitations and I will be pleased to finally get safe access to the larger workshop facilities at PHD Ltd when the time comes. However progress is happening again and I am pleased about that. Your builds are not too far away now. I will let you know when they are under way. Thank you for being supportive and very patient with all the historical custom build schedule delays. Regards Paul

I tried this circuit in my system back in the 1970s. The system was all self built except for the record deck and consisted of two Class A power amplifiers (a John Linsley Hood 1969 design) with his discrete component Phono stage and line preamp. The loudspeakers were 4 x Eagle FR8 full range drive units mounted in vertical transmission line sewer pipes with conical deflectors fitted above the drive units. As a four channel system it was fine with a full bodied and musical presentation albeit with diffused localisation of sound sources which could well have been due to the omni-directional characteristics of the loudspeakers. On reverting back to stereo operation the sound field re-positioned towards the front of course. As this was so long ago I would hesitate to say how well it would compare with present day systems as much has changed since then. However I can say that I did not experience any listener fatigue with either mode of operation using the Hood electronics and the Eagle drive units. The hood amplifiers were unconditionally stable into any load which may well have assisted with the easy listening. Regards Paul

Hi Dave, Historically, there has been a wide variation between EU countries mains voltage and the EU sought to harmonize voltages across the countries. When it was realised that some equipment rated for higher voltage input may malfunction with a lower input voltage and that equipment designed for lower voltage input may be damaged with a higher input voltage, the specification was relaxed to a compromise of 230vac with a higher tolerance than initially set, with equipment manufacturers expected to accommodate the tolerance in their product designs. I often measure mains voltage around 240vac and occasionally just over 250vac where I live. Having the primary split into two allows for operation in series for the nominal 230vac (which is a comfortable compromise in the EU) or in parallel for the nominal voltage of 115vac (which is a comfortable compromise for most American grid systems which can vary from around 110vac to 120vac). There are several options for manufacturers using mains transformers in their equipment regarding compatibility with 115vac to 230 vac. Select a single primary winding for a specific area or use two primary windings with some method of switching between the two voltages. As audio enthusiasts often sell on equipment they no longer need to other enthusiasts around the world, it is more convenient for them to be able to set the mains voltage compatibility on the equipment and less costly than sending the equipment back to the manufacturer for a transformer change. Regards Paul

Hi Mitch, Actually the mains input voltage on the SR4T can be reset internally by moving the transformer primary connector to one of two positions to change the input voltage from either 115vac to 230vac or visa versa. The earlier SR4 had an internal selector switch on the printed circuit board so these can also be changed to suit your mains voltage. It was not possible to fit this option to the back panel as there is no room for additional switches. If you need to change the voltage let me know and I will detail the procedure to access the internals. Regards Paul

There is a selector switch on the back of the power supply for 115vac or 230vac.

Custom build schedule update. For most of 2020 I have been stuck in isolation to avoid the Covid-19 contagion. Currently another round of the contagion is rapidly spreading and it looks like lockdown will continue for a while. In the mean time several Covid Vaccines have now been approved for safe application and we are seeing the start of a massive inoculation program in the UK. The vaccine roll-out will take some time due to the scale of the program so it is likely that a few more months will pass before it is deemed safe to regain some sense of normality. It was my intention to get much of the custom build schedule backlog cleared this last year but lack of safe access to the workshop in Lochboisdale collapsed this plan. I have been feeling the same frustration as many of you who have been patiently awaiting the re-instatement of the custom build schedule. Last month, due to general uncertainty regarding the Covid-19 issue I decided to look into re-creating a small workshop at home. The only conceivable available space in the home for this purpose was a small store room which was packed almost to the ceiling with storage boxes. So I decided that over the Christmas period I would put this plan into action. The storage boxes are now scattered around the house and I am not popular at home at present because of this, but perseverance has created some space. I will have to assemble a couple of basic work benches for the computer systems, and a small assembly area for progressing the custom build orders. The workspace is rather limited but should be serviceable as a temporary measure until it is safe to return to the Lockboisdale workshop. Whilst the staff at the PHD Ltd Lochboisdale workshop were still on their Christmas/New Year holiday break, I collected all my computer equipment and test equipment ready for installation in my new home workshop. I also collected enough materials stock from my custom build materials store in Lochboisdale to get the ball rolling on custom builds. Hopefully I will be able to fit all this in without too much space restriction. For those waiting in the custom build schedule I look forward to informing you when your order is completed and ready for shipment. All the best for the New Year. Regards, Paul

Actually the custom queue is not yet moving as build 18 was placed on hold while I upgraded the 3A modules to 6A modules. By the time I had finished building 18 I had the double health issues at the beginning of the year and just as I was returning to the workshop the covid lockdown was instigated. I still had to put 18 through the soak test and make the DC leads. Fortunately Stephen at PHD Ltd recently volunteered to make the DC leads as soon as he could make a time slot for me and I was then able to complete the soak test at home. I shipped 18 out as soon as I could. The build schedule is still in hibernation at present, but I will be back in the driving seat as soon as it is safe for me to attend the workshop. The Vaccine is the game changer that will help me get there. Unfortunately I have not had the covid vaccine yet, however, on Wednesday I had a flu vaccination which will hopefully help avoid complications, should covid find me this winter. I did ask the nurse about when the covid vaccine will be available here and she was unable to say but she did say that I would be contacted as soon as my time for vaccination arrived. I guess we (including me) will all have to be patient a little longer. So far we are OK, although there have been cases locally, and one person living in Lochboisdale was infected very recently by covid and failed to survive. This has caused considerable shock locally as we have a tight knit community on the island. I am very concerned that the distancing rules are to be relaxed for Christmas and people will be allowed to visit the island from the mainland. I hope this will not be a recipe for disaster, like the relaxation of rules on the mainland. All the best through Christmas and New Year and stay out of the way of covid. Regards Paul

I spoke too soon regarding the return of Covid-19 lockdown. The news from around the world shows an alarming rapid increase in infections. I guess this was inevitable with people assuming they could return to normal life without the safety net of a proven working vaccine. We all need to consider carefully how we conduct our daily activities and to take steps to avoid infection if we are going to halt the spread of Covid-19. The Isle of South Uist had fared very well compared to the rest of the world as all unnecessary travel between the islands and the mainland was banned through the first wave of covid-19 infections. Unfortunately against the wishes of many residents here the restrictions were lifted in August and the influx of tourists has now introduced Covid-19 to the island. At the beginning of last week there was an NHS notification of three confirmed covid-19 infection cases in South Uist. By Saturday the number had risen to seven and last night on the BBC Scotland news the number had risen to seventeen with location information centred around Daliburgh a mile away from where we live. The last time I noticed the island population was circa 1,800 and to put this into perspective this is the equivalent of 944 infections per 100,000 of population, which is way ahead of the proportional infections currently seen elsewhere in the UK. In view of this devastating news, and because it is impossible to guarantee safe use of the communal areas at the workshop, PHD Ltd has reverted back to pre lockdown release operation. Stephen and his assistant are alternating working days to keep PHD Ltd production running. The rest of the PHD Ltd staff are isolating back at home, and I am also now back at home isolating and shielding disabled family members. Unfortunately this means that my custom build schedule is back on hold until it is safe to return to the workshop. Sorry to be the bearer of such bad tidings. Regards Paul

Hi Geoff, I have been back in the office since Wednesday. It was stacked high with boxes and equipment which I have temporarily moved to the main reception office while I get the workbenches and storage shelves organised. Next week once the work benches have been assembled I will be installing all my equipment and then there is quite a lot of admin to get up to date with. I also have to build and electrically verify the new DR regulator module printed circuit board with the Turbo option on both of the DR regulators. Once this verification is done the turbo upgrade option can be applied to any outstanding DR power supply orders if required. My best guess for restarting the custom build schedule, assuming we do not end up back in Covid-19 lockdown again, is the following week, with build 20. Regards Paul