A DRAPER'S BANKRUPTCY.
BOOKS" TO BE INVESTIGATED. The meeting of creditors in. the bankrupt estate of Joseph Powell, draper, of Karangahape-road, was continued after we went to press yesterday. Mr. H. Gerard presided. Mr. Gerard intimated that his agent had valued the stock-in-trade and fittings afc £753 ISs Id, as against the bankrupt's estimate of £1300. Mr. R. H. Abbott said that he wished to reply to certain statements that had been made by Powell. " Powell was formerly in business with his brother, and on their assigning their estate in 1902, J. Powell represented to .us that their non-suc-cess was due to divided methods in conducting the business. The upshot was that we agreed to buy the assigned estate from the trustees and reinstate J. Powell. When J. Powell started again, the face value of the assets greatly exceeded the liabilities, and Powell informed us that he had never .before been in such a good position. Things went on with varying success till 24 years ago, when the position became congested and Ms liability to the firm 'had mounted up to about £1300. Powell, through his solicitor, called a meeting of his creditors and represented that he was doing too much with one firm and 'he wanted to be in a position to buy for cash in the open market, upon which he was sure he would soon pull out. To enable .him to do this, he asked for twenty-four months' extension of, his then, liabilities without interest. Although the brunt of this assistance fell on R; H. Abbott and Co., they agreed to it, but informed Powell that under the altered circumstances his account would have to be reduced. As the extension bills ran off, they limited his purchases to small sorting up lines, and reduced the account. As a matter of fact, they had considerable difficulty in collecting the extension bills, and, instead of Powell pulling out, they found that he was diverting his slender capital into the purchase of house property, whereupon they considered it their duty to keep him to the mark in regard to payments and further reduce the account. Nothing was done to prejudice his position and every reasonable leniency was shown. Although Powell owed them for some years about two-thirds of his total liability, they only received an amount equal to one-third of his takings, after deducting expenses, and they found that for six years Powell obtained from them an average of over 12 months' credit (including renewals) on his purchases instead of the usual trade terms of five months, As to his business premises, which lie alleged placed him under the thumb of R. H. Abbott and Co., Powell's shop was one of a block that happened to be Mr Abbott's property some years ago. From Powell's statement it was inferred that he was a weekly tenant, instead of which he was always under a lease —a five years' lease, with two years' right of renewal. This seven years was nearly out when Mr Abbott sold the property, and he went out of 'his way to secure from the purchaser a promise to give Powell a further lease on the expiry of his existing lease. Further, the fixtures in Powell's shop, not legally attached to the walls, i also counters, and mirror glass in window, were Mr Abbott's private property, and on selling the property he made Powell a present of whatever his interest was in these fixtures, counters, mirrors, etc., and Powell's various balwould esihlbit his assessment of the gift. He put it to any business man who looks into Powell's dealings with the firm to say whether he has not been treated with a degree of patience, leniency and generosity, quite out of the ordinary." It was moved by Mr. Oaudie, and seconded by ■Mγ. Abbott —"That tenders be called for the stock and fittings." Reductions, said Mr. Gerard, had been made amounting to £66 from the stock by the agent, while the fittings, which were estimated by the bankrupt at £ 214, were valued by the agent at £85 14s 9d. There were some £40 worth of fittings claimed by the landlord. The insolvent said that the fixtures had been handed over to him by Mr. Abbott, and had always appeared on his stock sheets. Mr. Abbott said that he bought the fixtures from the Iredale estate, and gave all that was legally removable to the bankrupt. The Chairman went on to say that several of the bankrupt's other estimates were considerably wide, and it was ultimately decided to leave the method of disposing- of hi 3 private property to Mr. Gerard's discretion. Being sworn, Powell said that his signed statement was absolutely correct in detail from start to finish. In March of last year he had a fire at his shop, and this did not tend to forward matters. The prime reason why he could not make headway was because E. H. Abbott and Co. would not give him the stock he wanted. His monthly expenses were £46, his own drawings being £4 4s a week of this amount. (Roughly, .his turnover from September, 1908, to April 1, 1909, he estimated at £1100. As for expenses, his rent and rates amounted to about £5 a week, average wages about £4 a week. Occasionally he was helped by his wife, and he averaged a total drawing of £4 4s for their own use. Advertising and ticket. writing amounted to about 15s a week, gas about ss, paper ss, insurance on stock ss, postage about 2s 6d. For the last six months he had been really running a continuous sale, owing to an endeavour to quit bad stock, etc. Under ordinary circumstances he would make about 25 per cent, profit, but of that £1100 he did not think any was profit. In that time he had paid approximately £630 to his creditors. Mr. Gaudie moved—"That an investigation be made of the books by an accountant, and a report therein be presented." This was unanimously agreed upon. Mr. Abbott denied that Powell had paid his firm anything like £1000 a year, as said in the statement, and declared that the whole statement was full of incorrect assertions. Mr.. Gerard remarked that did either Mr. Abbott or Mr. Powell feel aggrieved, they had recourse to redress outside of that court, which was only to deal with the bankruptcy as it affected the creditors at large. On the advice of the assignee, it. was decided to keep open the shop until the tenders were called. The meeting then adjourned sine die.
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A DRAPER'S BANKRUPTCY., Auckland Star, Volume XL, Issue XL, 17 April 1909
A DRAPER'S BANKRUPTCY. Auckland Star, Volume XL, Issue XL, 17 April 1909
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