A CONTRACTOR'S BANKRUPTCY

Auckland Star, Volume XLIII, Issue 215, 7 September 1912, Page 9

A CONTRACTOR'S BANKRUPTCY

CREDITORS' MEETING.

The meeting of. creditors in the estate .of 0. E. Farrow at the Official Assignee's office lasted until late yesterday after.noon. The assignee was empowered to seir the stock and plant in the estate by public auction. -Mr Fisher said he had gone into the figures, and estimated that the estate would pay .1/ to 4/ in £he £. A resolution was adopted confirming the action of the trustees for the. realisation of the estate, and requesting the assignee to pay all costs and charges connected therewith. Mr Fisher said he believed a transaction was void as against the official assignee in respect to a safe or an alleged sale of a quantity of' asbestos prior to bankruptcy. It was for the creditors to state whether they wished that matter followed up. A resolution was adopted that, the official assignee he authorised to take any necessary proceedings to upßpt that or any similar sales. The meeting instructed Mr Fisher to collect tho book debts, and Messrs (.'ook« ami I'rinid were associated with Hie assifTnee In Hie mutter of dealing wild the property at Takiipiimi. The Assignee said the Grey Street property had lipcii sold by Mt Friend lor ■£100 more than the mortgage, but about &JO hud been swallowed up in back interest and other charges. Being a trustee prevented Mr Friend from charging commission on the sale.

The crHitnrs thereupon voted £20 to Mr Friend.

>fr P. Wihstone said he would like Mr Furrow tn explain a matter. The books showed that. in. June. 1011. the debtor was £1,300 to the bad. yet about that time lip submitted a. statement tn the speaker which practically showed fJOfi assets. Mr Farrow said his assets had bppn pulled down very much. Mr Casey asked the debtor how much capital he had when he started? '•About £200." was the reply. Mr Casey next inquired about, the Kdendalp School comrnet. and was informed that the debtor lost £ - 20f) upon tlmt job. Mr Casey: And you lost £70 on the next job. Ml- Wihstone having handed in the statement to which he hid referred. Mr Fisher questioned the debtor regarding it. .Mr Furrow said it w&s in the handwriU ing of his clerk. He drew attention to the fact that it showed works in progress £2.400.

Mt Fisher: flow do you account for t.he difference in the statement' and what your" books show, namely. £406 nnd £i.:iso?

Mr Farrow said it was only lately he had learned that hie books showed he was £1.380 to the bad in June. 1011. That was because he had so many works in hand. The statement- made out by his clerk was not then to his idea incorrect. It was the position as near as his clerk could, grt at it at. that, date, as it was only lately they finished all their jobs. Mr 11. C- florric (aceonntant) said the debtors books showed he was £1.300 behind in 1010. and that his drawings exceeded his profits during the next 12 months by £(>O. Debtor said if the statement were incorrect, hi- was not wittingly misled by his clerk. TTie. books won*'mad" up much l:ilor._The statement was prepared by hie instructions. He told.the, clerk he wanted the statement to show to Mr VY historic. By Mr Fisher: He did not recognise his position as being acute until ii day or two before July 19. He thought he would have been all!-,' to realist- on the Grey Strerrl properly. l"p till the date mentioned he was able to pay his way. It was sett liner up half a dozen jobs at once that, showed him his real" position. Mr Kelly: You had to settle at some time.

Debtor: It is very easy baiting one here, but I am ready fnr any of you singly. I hope some day to lie able to pny you all. Mr Kelly: On the Kathleen Mavourneen system. "It may be for years, it. may be for ever.' .

By Mr Fisher: He was always nlile to rail" , roady monpy up to that da-tc. He first learned he was insolvent when his assess began to be pitlfed down. Hp always expected he.could get £2.400"f0r the ("irfy Street property. He did not realise he was, insolvent until he assigned. He did not realise, in June. l!U0, that his books showed he was over £1.300 to the bad. He knew more about, bookkeeping now than he did- in June. 1910. He had

a general idea of books, but did not understand the capital account. His hookkppppr was an acocjintant who had passed an examination. His bookkeeper did. bring to his notice in 1911 that he was £1.300 to thp bad. but they went into thp works in progress and discovered some dis crppaneies in the figures which mo.de it better for him. Rectifying that, put, him right, although the books were not altered. Accounta.nts had an objection to altering books. When ho started borrowing about two months ago his interest would average about eight per cent. If his books showed he had been paying between .T2 and 40 per cent, that "was incorrect. By eight per cent, lie meant per annum. Mr Fisher: If you paid eight per cent for three months that would be equivalent to 32 per cent, per annum. Debtor said in one instance ha might have been njislerf and paid at that rare, but in only one ease. He could not remember having shewn another principal creditor a statement, of his affairs last June showing a substantial credit. MY Fisher asked whether the creditors would authorise employing an accountant to go thoroughly into the accounts. Mr Graham moved that. Mr fj. ('. Oorrie be appointed to investigate the bonks. which was apeomled by ]Vlr A. M. Ferguson. Mr Biirtt said they had lost enough money without going to further expense in that way. Mr Winstone considered an investigation was absolutely necessity. Mr Ferguson said lie was surprised ajiyone should consider a 3/3 dividend in the £. when a question ■• (if commercial morality might be involved. Mr Hammond remarked that t»n investigation might end in smoke, and the shareholders would be worse off.

The motion to engage Mr (Inrrio was agreed to. Mr fisher said he wished to express his appreciation of the assistance that had already been given him by MV florrie. The meeting then adjourned pending receipt of the auditor's report.