I would like a clear answer to my question. Sorry Tim but saying that I have nothing to worry about does not tell me what happens with deposit money and returned 6XXX radios if Flex was to face a financial crisis and has to file for bankruptcy. I have no idea if the money and equipment is legally shielded in a trust from potential creditors or not. I simply want to know clearly what would happen to my money and equipment in this scenario (even if unlikely).
Here is my original question. "Not saying it is going to happen or start any rumors but what happens to the deposit money and any Flex 6XXX that might have been sent back against a trade in price on a new 6400/6600 should Flex go insolvent (bankrupt)?
Would I be correct in assuming we would all be unsecured creditors and get zip back except what might have been paid on a credit card (maybe not if the time stretches out past the credit card providers guidelines for claim filing)?"
To Steve K9ZW and others. Please hold back from your need to step in and defend or explain for Flex against every post that in your mind you seems negative. I believe I have a right to a clear answer about what could happen with my money and equipment even if the possibility is remote. In the end I can make the best informed decision of the risk tolerance I want to take with my money. Your risk tolerance does not really enter into what is best for me.
I am not sure of the legal requirement for a company such as Flex to disclose to a person depositing money or equipment the potential for loss but certainly when directly asked a complete answer should be given. Additionally, I do not know if Flex has any financial options or vehicles available to it in which it might protect the deposit money and equipment from such a event (however unlikely).
In the EU, a company is required by law to hold any and all deposits in a separate secure bank account. This is often known as the "clients account". This is a legally ring-fenced account which a liquidator cannot use for company funds or regard them as company assets. In the event of liquidation those funds must be returned to the client due to failure of contract.
But it's unreasonable to ask any vendor you are dealing with to explain exactly how their liabilities would be managed if financial disaster strikes. It's unlikely they've made such a plan. If they did, they would not want to announce it to the world. I.e. that creditor #1 will get his while creditor #2 waits. There are legal restrictions, too.
There is more than one vendor asking for big, unsecured deposits against future product delivery. It is not unreasonable to ask what the risks might be. If you're not comfortable, you shouldn't make the deposit.
73 Martin AA6E
but all is well at FRS in Austin, Texas
I've lost money funding a electronics project on kick-starter (https://www.kickstarter.com/projects/kickshark/hydradock-11-port-usb-c-dock-for-apple-macbook/posts/...) but I was sure to invest only what I was OK losing. I wasn't sore about the project failing and I felt bad for the project's team. I think their team was young and they just mismanaged their project.
In comparison, we're approaching the 15-year in business mark -- we're no kickstarter. We've successfully delivered tens of thousands of products, a number of which were on the "place a deposit" style of development. We decided to do the deposit mode of building products because it helps us predict how many we need to build up front to meet market demand and it ensures we will always build enough for those loyal customers that put money down. It's a fair system and it's worked well for us.
We do not have your money in a trust. A trust is not an appropriate vehicle and would take considerable time and expense to set up. We would have to appoint a trustee to oversee the funds and we would have to prove to the trustee that we did, in fact, build a product to your satisfaction before retrieving your deposit. I don't suspect our customers want us to tack on the cost of establishing a trust and hiring an attorney to oversee our operations. In short, the market is liquid enough that we feel comfortable telling customers that we would return their money if they don't want to purchase (other customers who missed the deposit time will purchase what they have decided not to). I have no idea without sending our accounting and legal team off on a multi-day project, what order you would be in, as a creditor, were something to happen to FlexRadio. My advice would be not to put any money into a project that you cannot stand to lose if something awful were to happen, but I'm not a financial advisor. You should consult your financial advisor to get their advice on your personal financial situation and how an unlikely and sudden demise of FlexRadio would affect your finances.
First, let me begin by explaining why we take deposits on new products. This allow us to accurately gauge the commitment level for early production quantities on products where we have no run rate history. We have taken deposits on every new product except one since 2007.
Due to the high peak volumes experienced in early production and the long lead times involved in procuring materials, this allows us to better plan to meet early demand. The one product where we did not take deposits was the FLEX-6300. We under forecasted our initial demand by 100% and were criticized because it took us quite some time to catch up.
We have already sold out our originally planned production for the new radios and have now given our manufacturing partner a nine month rolling forecast. Materials lead times have streatched dramatically this year due to economic growth outpacing new capacity in electronic component manufacturing. This may lead to stock out situations from time to time depending on demand relative to component supply. If you place a pre order this helps us secure a place for you in that supply chain.
As with any transaction, there is always risk. You are placing your trust in people who run companies and provide services. I take your deposit as a personal commitment to deliver. Our team takes your deposite as a personal commitment to deliver. My banker looks at me personally in the same way. We have placed some very large deposits with strategic suppliers in other countries where I look to them in the same way.
All materials are on order and we are waiting for a few of the longest lead time custom items to arrive later this month. The entire team is working hard to prepare for production start up and preparation is going well.
If you are uncomfortable with this answer, you are welcome to have your deposit refunded and wait until after the first of the year when supply and demand balance out to get a radio. Then you will have no risk.
@John K3MA - Gentlemanly manners would suggest if you are this paranoid about the status of a relatively small deposit that you might have pick up the phone and call them.
Repeatedly asking questions thread after thread, and setting aside the words of the official FRS spokesman is enough of a slander that folks might think you are trolling FRS, rather than going right to the source by asking them in private.
Calling me out as a responder that you discredit is similarly unhelpful. I wouldn't even do this response but for your offhandedness posting.
Remember in this product launch the only thing you gain from a deposit is a place in the delivery cycle once products start shipping.
For some folk that small advantage in an earlier product delivery may not be worth the $200 to $500 deposit.
Reading your post starting this thread you even seemed worried about "your equipment" which may be a misnomer at this stage in the product cycle.
Like Steve N5AC, I've had negative results from Kickstarters and other "crowd funding" projects.
It is worth pointing out that this Reservation deposit is NOT "crowdfunding."
We're talking putting just 10% down as a consumer's show of good faith in this particular product cycle - that is $200 to $500 to get a place in line rather than waiting for uncommitted stock to be available.
As this is an evolutionary product, a next generation implementation of the a product line well established, the risks are reasonable for most folk.
That said, as in Steve N5AC's disclaimer language at the end of his post - if having a $200 to $500 deposit with a firm is personally financially risky to a person they may want to reconsider whether making a reservation is worthwhile to them personally.
All best, hope all the information provided is truly helpful for you, and catch you on the air!
Well worded, indeed.
I wouldn't have been nearly so nice...
Regards, John K3MA
Actually, I have a question - why not do the legal research before entering the group and raising what will become a rumor - unless that is the point? It took me less than a minute to find a definitive answer. (NASDAQ)
This is a very cut and dried process, as outlined in the link from NASDAQ, and creditors have access to funds as they run through the process. At the point of bankruptcy, you become a creditor. To any company.
Another angle on this deposit is letting the XYL know there is money out there and should the OM go SK be sure to recover it. Of course when on tells the xYL she's libel to hasten the SK process.
Note PSE swap gender pronouns as appropriate.
I want to start out by saying using the Community is a privilege, not a right. What you contribute, how you communicate it and respond has consequences. We are fairly relaxed in regards to moderation and our Community Guidelines are based on common sense and general decency based on the premise of treating others (and FlexRadio) in the same manner as you want to be treated. It really is that simple.
There are always going to be disagreements between people in any public forum on beliefs and their opinions. It becomes more aggressive when there is a screen and keyboard to insulate one from face to face civil discourse. This is what needs to be dialed down.
There will be those who feel that certain criticisms and demands made upon FlexRadio in a public forum are unfair. And they have the right to comment, just as much right as those who are free to post their complaints and concerns within the context of the Community posting guidelines. Occasionally those posting complaints are very passionate, sometimes to the point of being angry where the language is overemphasized to make their point, which is superfluous can escalate a response. The opposite can occur too when an over the top complimentary post is made that doesn't align with reality. Occasionally replies are intended to get in a "dig" or to troll a poster. This is not adult type behavior we expect and violates our basic tenant I outlined in the second paragraph. This whole "escalation" behavior is unfortunate and results in some raw nerves. I say unfortunately because it shouldn't be a consequence of allowing both sides of view to be equally expressed.
I'd like to remind everyone on both sides of this dynamic that, as the first sentence of the Community guidelines say "...remember when using the Community always show respect to others regardless of their opinions." This includes not using inflammatory language to state your question, position or opinion. That includes the ones who are expressing complaints and those who feel they have to defend or argue the point. And I believe everyone knows when they are guilty of it. The Delete key can be your best friend; use it. Be constructive; not destructive or inflammatory.
Also, remember that the Community is not the exclusive way to communicate with FlexRadio. Personal business or issues need not be conducted in public, contact our Sales team if you have a concern. If you have a support issue that requires an official FlexRadio response, the HelpDesk is the primary way to get assistance.
One of my responsibilities to FlexRadio and to you as customers is to balance open and free expression vs. making the Community a "safe place" while not allowing falsehoods, slander, and libelous speech. It isn't a straightforward or black and white process, but I know when the threshold has been exceeded. It is a difficult decision to decide when to close a thread. But I have the responsibility to everyone in the Community do so when the posters question or concern has been answered authoritatively and the escalation dynamic quotient has risen to the point where the discourse is no longer providing any viable contribution.
I have decided that the aforementioned threshold has been reached so I am closing this post.
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