Originally Posted by propr'one
Can someone post some links to some facts about HPF's failures?
A lot of people are slamming their tunes and parts and i'd love to get the facts and judge for myself.
Here you go:
Your not as smart as you think Kenton, for instance. The company is not doing a bankruptcy for one! 52% of small business's fail with in 15 years. You somehow take your personal views and twist them into some sort of fact with our having a single fact correct! There was not a single law broken that's a fact. The stupid commemts about drug use shows the dept if stupidity in this thread. The amount of "lawyers" on this forum is pretty shocking. I will let you in on a couple of details.
1. Chris contacted the Portland police dept the second theft was known, they took 3 weeks to watch David. Remember it's not a murder and is not high up on the list. Problem was it wasn't just Credit Card fraud, there was wire fraud. Hate to burst people's bubble but there was a lot of other customers than our cars. The credit card companies and banks waited until David was convicted. All hell broke loose with them the week prior to closing.
2. More than 6 months before the theft Chris changed insurance companies for a cheaper rate with what was to be "same" type of coverage. The emails between the agent and Chris supported that argument. Problem was the theft coverage and the damage to reputation because of theft changed from $500,000 to $25,000.
3. Here was a big portion of why they failed, they had a sliding scale lease clause. At the 10 year mark the rent would reset to current market value. HPF rent went from $8500 permonth to more than $13,000. Chris and I had been working on sub leasing out more than half of his space. We had completed that two weeks before they closed.
4. The turbo kit sales plunged from 3 per month to one every other month, the only reason this happened was the massive delay in the AEM Infinity. It was supposed to be released 9 months ago. This was a major blow to HPF, that set it up for the next event that killed them.
5. HPF was tagged as a possible fraud location with the credit card companies due to the credit card charge backs looming during David's trial. They raised the processing fee from 1.5% to more than 7.75%. This was brought back down to 1.5% during the repayment talks. But the 7.75 had been cutting deep for 6 months.
6. HPF released a major update to their website 4 weeks before closing, at this point HPF treading water and had worked out repayment plans to the credit card companies. This is a very important part to understand. Each credit card company would get a minimum amount each month. This wasn't a bad deal because HPF was going to appeal the prior case a freeze the payments. They had released Josh the companies 2nd highest paid employee. With the subleases done and Joshes wages freed up it added $125,000 per year! The software update was released on a Tuesday, prior to this the online side did $50,000 per week. Over the next 10 days the sales plunged to $4500-$6000. They quickly switched back to the old version. Kirk can verify this plunge. What ever it was it followed it back to version 3. HPF worked frantically trying to find what they problem was. We are 10 days from closing when Chris hires an outside company to try to find and stop the problem. The problem was located 4 days before they closed. Monday the day they closed, sales had dropped by 75% and everyone had forgotten about the payment plan. Everyone at HPF was focused on the website sales plunging. The first major payment to the credit card companies was to happen that Monday, $32,000 worth of payment. Attempts were made to delay it for 10 days. Calls to their attorneys did not stop it fast enough, in fact it started a frenzy of debit attempts. By 1:00pm it was clear that HPF had no way to make payroll. Under Oregon law, you have to close the second you know you can't make payroll. That's why there was a mid day closure.
7. HPF's property management locked the building delaying the shipping.
They were other mistakes made also, such as that stupid drag car. My point is there was no crazy mismanagement or drug use as people have claimed. My accountant and attorney had been watching the spending. HPF could have entered into chapter 11 bankruptcy had it seen the what was going to happen on Monday. But with the funds yanked out, it left no money for payroll. I was trying to free up the funds to keep it open, but I was weeks out not days. I paid the $26,100 to the property management company to get access back in. Keys will be delivered hopefully today. I expect the orders by the back door to leave very quickly. Guys with cars in the shop, you will hear from Kirk shortly. Once I sell off the website and turbo kit rights I think there should be enough to repay the cash deposit guys. HPF did 94% drop shipping, there was no warehouse full of parts to sell. I really wish there was!