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MEETING OF CREDITORS., Auckland Star, Volume XL, Issue 92, 19 April 1909
MEETING OF CREDITORS.
MORDAUNT AND BAILEY. A meeting of creditors in the bankrupt estate of lienry Mordauut and Charles Bailey was heid at eleven o'clock this morning in the Oniciai Assignee's omee. Mr. v. K. Keed appeared lor the iirin, and Mr. linlay lor ali". Bailey personally. Mr. A. Haima appeared for the petitioning creditor, ;.uu Mr. Wynyard for anotner creditut. Mr. Hugh Gerard, who presided, stated the liabilities to be £2,G04 7/4, and the assets were set down as follow:—Stock in trade, £358; book debts, £139 13/11 (estimated to produce £100]; furniture, £15; and balance of property above security held by certain creditors, £2,740 7/-; total assuts, £3,213 7/-, leaving an apparent, surplus of £008 17/8. The joint statement of the debtors was read, showing they entered into partnership as builders and timber merchants at Te Kuiti. The timber yard was not successful. They took building contracts and started a joinery factory. They were always short of capital, but not seriously so until last spring. They had sold the factory, but the purchase was not completed. Their assets were ample to pay all their creditors, but owing to the stringency of the money market they could not be realised in a hurry. The sections they had secured had increased in, value if they coidd only be realised. 'Mr. Reed said as far as he could learn, the only chan-ee the creditors had of getting 20/- in the £ was by not hurrying the realisation of the assets. He suggested that the creditors might consider the advisability of forming themselves into a limited liability company, and wait until the properties could be realised. He understood the cost per annum (interest on mortgages and rent) totalled £213 15/-, and was assured that if the factory and the sections could be let, they would bring in £250, which should pay all out-goings. He was speaking entirely without any personal knowledge of the properties. If the sale of the factory had been completed, all the creditors would have been paid in full. Mr. Gerard said the valuation put on the properties was £4,150. A gentleman representing Te Kuiti creditors said he should consider the properties over-valued by about £2000. Mr. Hanna: I may say at once my clients will noti wait. Henry Moraaunt, being sworn, deposed he had about £20 capital when he started his first contract at Te Kuiti four years ago. That was before he joined Mi: Bailey. When he entered into partnership with Mr. Bailey, there was a proper agreement darwn. Each provided about £ 100 capital. It was agreed that each should draw 80s per week wages. They had always been short of capital, as the business got too big for them to handle. One creditor began to prees them a-bout 18 months ago. The land was acquired under lease from the Maori owners. They had an overdraft from the bank on depositing the deeds of the land. At one time the overdraft stood at £1300. The limit was fixed at £500 early in 1908, and they were asked to reduce to tJiat figure. They reduced it to £938 before being pressed to reduce to £500. On April 22nd, 1908, they obtained £ 1000 on mortgage, giving a3 security (all the land but section 9. Up till then there was no encumbrance on any of the properties. He gave a. mortgage on section 9 on th-e understanding it should not be registered. It was, however, registered and transferred, as he had not paid up in time. Mr. Porter said he held a mortgage on section 9 on the understanding there was no other mortgage. Debtor said 'he was not aware at that time the other mortgage had been registered. He subsequently released that mortgage. In the. meantime he made arrangements with Mr. Porter to get £■250 on a first mortgage over section 0. Mr. Gerard: How soon after you got the money from Mr. Porter weTe you (aware that the other (mortgage had been registered t Debtor said he could not from memory give the actual dates. His partner was fully conversant with these transactions. The frrst mortgage was paid off by a cheque dratrn on the bank, the amount being guaranteed by a Mr. Gibson, to whom the mortgage was transferred. Mr. Hanna said if the first mortgage was paid off, then it was non-existent, and could not be transferrd to another person. Debtor explained he had paid Mr. Porter £100 off the amount lent. Mr. Hanna asked what security Mr. Gibson was to get for £500 he paid in. Debtor said the mortgage that was transferred from the bank, and a second mortgage on the other property. Previous to that Mr. Gibson had lent £300. The holders oi the first mortgage were paid off, and the deed was deposited with the bank. He thought the deed went to Mγ. Gibson. " Mr. Porter asked debtor if he had not given him a first mortgage over section nine. Debtor said that was so. He was not then aware that the other mortgage was registered. By Mr. Gerard: He did say to Mr. Porter that there was no mortgage. He idid so believing there was no mortgage until the deed was registered. Continuing, witness said they practically sold their business last December. He took a deposit of £20, and handed over possession. The purchasers were ito pay £2.700 for section nine and section eleven, block seven, with the buildings thereon (oash and door factory, and four-roomed dwelling house, stock room and finishing shop). There was also a •moulding shed' on Isectiort nine. The whole lot was purchased as a going concern, including the machinery. Had this sale been completed, the creditors would have got 20/- in the £. The meeting adjourned at 1 p.m. nnd resumed an hour later. The debtor, under examination, stated further that when the sale was arvtinged an inventory was taken of the stock. The sgrpcnieiit provided that in the event of sale not being completed, the purchaser was to pay for all material used. The items were taken, but prices were not fixed. The ordinary market prive was agreed upon as a basis. The purchasers took possession on December 18th, 1908. On the 26th, 190 D, Mr Bailey was informed that the purchase would not be completed. Debtor had arranged that his- partner was to take possession in the event of th« purchase not being completed and sto>ck being removed. Stock was removed on March 2fith. During tha four months they were in possession the purchasers kept the factory at work. Mr Gerard: "What became of the product of that work?" Debtor said he was away at Hamilton and could not say.
MEETING OF CREDITORS., Auckland Star, Volume XL, Issue 92, 19 April 1909
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