THE CREDITORS OF COHEN.

Auckland Star, Volume XLVI, Issue 70, 23 March 1915, Page 2

THE CREDITORS OF COHEN.

A CHANGE OF FRONT. ASSIG>TEE CONTINUES PROSECUTION. FOR BANKRUPTCY ACT BREACH. "This is a ease which, so far as my experience goes, stands by itself as a failure to keep books, in that it has the same result as if the failure hod been deliberate," stated Mr. Solwyn Mays in addressing Mr. E- C. Cutten, S.M., this morning in support of a prosecution instituted by the Official Assignee against Noah Cohen, that, being a bankrupt, he ■had not kept proper books of account according to the Act. A further charge laid of having disposed of goods obtained by credit other than by the ordinary way of trade was withdrawn.

Air. Mays stated that defendant had become bankrupt in December, with liabilities of £1,160, and no assets whatever. About three years prior to his bankruptcy Cohen had a place of business in Auckland, stated counsel, but most of his time was spent ac a hawking jeweller. A report as to his position relatively in June, 1913, and in June, 1914, prepared by a qualified accountant, had been presented to a meeting of the creditors, and it was an angry meeting, in which the creditors pas sed a resolution 'requesting the Assignee to pToeeeute the bankrupt. By a curious somersault with respect to some of the creditors, after the bankrupt had interviewed moat of them, the creditors had written to the Assignee, asking that the case against the bankrupt be withdrawn. Of course, the Assignee could not do that, ac it was his duty under the Act to prosecute where he considered there w&4 a breach of the Act, even though the bankrupt might be able to pay 20/ in the £, as some of the creditoru in the present case seem to have been persuaded. Mr. Gorrie's report showed that no books at all had been kept that would show what the bankrupt's position in 1913 was, and the position had to be reconstructed from information supplied by the creditors and the statements of the bankrupt Some of the asset 3, etock worth about £700, was sold for £380, apparently with the consent of the creditors, to supply money for a composition with the creditors. The furniture, bankrupt eaid, belonged to his wife; some money the Assignee came across in a bank the bankrupt eaid belonged to his partnership; and there was no clear record to show if assets were available from rents to 6ub-tenante. There were serious loeees shown in the business, hut they could not be traced by the books. If he had done it designedly, the bankrupt could not have done better in blocking the Assignee from finding out the actual position.

.Mr. R. A. Singer appeared forthe bankrupt, who admitted the charge, and counsel pointed out that the prosecution had dropped the chief charge, and proceeded with one which did not involve intention to defraud. That despite the black complexion sought to be put on the case by Mr. Mays, counsel stated th;ftt"defendaiit Ji.a,d been in -business for sixteen years in Auckland, and bad always hitherto paid up fully and been fully trusted by his creditors. Latterly he had liad a series of misfortunes, having lost' £600 or £700 by'a burglary, and about £600 by the defalcations of employees. Then he decided to try the jewellery auction business, which was unsuccessful. His cash-book, stated counsel, showed all his transactions, and the position could be obtained from that, though it would probably cost a sum of money the Assignee was not authorised to spend. In July, 1014, he put his position fully before his creditors, showing that he had a stock worth £700 and liabilities of £1500 or £1600. The creditors entered into a deed of arrangement with defendant, which provided for the payment of 5/ in the £ immediately, and the balance at the rate of 5/ in the £ per annum, and also agreed that the £700 stock be sold for £380 to provide the first payment. The stock was sold in one lot for that Bum, ami then the one creditor who had not signed the agreement bad defendant made bankrupt, by petition. The anger of the creditors at the creditors' meeting referred to was caused by defendant's reprehensible manner to one of creditors, but after the meeting the creditors realised that in the circumstances, seeing that defendant had previously made known his position, it was a proper thing to ask the Assignee not to prosecute. There was no element of fraud at all. The defendant had absolutely no knowledge of book-keep-ing, and his wife who had tried to keep the books, apparently knew but little more about it.

His Worship: I have before mc the charge of failing to keep proper books, and it is about as bad a case of not keeping books as it is possible to have. What you say about the other matters cannot, 1 think, alter my" opinion.

Mr. Singer stated that it was the suggestion of fraud that he wae combatting, and his remarks were directed to showing that the creditors had been satisfied in that respect.

At this stage the Court adjourned for lunch, and his Worship intimated that he would further hear counsel for the defence at 3.30 p.m.