CREDITORS' RIGHTS.

Auckland Star, Volume LII, Issue 250, 20 October 1921, Page 5

CREDITORS' RIGHTS.

i . BEPAT. OFFICE INVOLVED. ACTION BY-OFFICIAL ASSIGNEE. A claim against the Soldiers' Repatriation Department by the Official Assignee for the refund of £286 alleged to have been obtained by the Department to the prejudice of other creditors in the bank- . rupt estate of Hendrickson and Harding, storekeepers, or Wnangarei, was opened at the Supreme Court yesterday before Mr. Justice Herdman. The general circumstances outlined by Mx. Leary for the petitioner assignee, were that the bankrupts, two returned soldiers, borrowed £300 each from the Repatriation Department to put into their storekeeping business, and signed a bill of sale over the stock and plant. That was in August, 1919. They failed to make a success of the business, and at the beginning of 1920 Hendrickson informed the Repatriation Department of their difficulties. On May 4, apparently as the result of this information, an officer of the Department visited Whangarei with a purchaser. Ford, and an agreement was made whereby the latter purchased the business for £466, after taking stock. At the same time a sum of £107 which the partners had in the bank was withdrawn by cheque drawn by the partners and given to tile Repatriation Department's representative. Up to that time the Department had been repaid £67 9/1 by the two men. At the same time a solicitor was appointed to collect the book debts of the firm. The Department by receipt of the purchase money, the cash in the bank, and the money previously repaid satisfied the firm's debt to the Department, and paid an excess of £24 15/ to the solicitor appointed to collect the book debts of the firm. On Mar 29 Hendrickson and Harding filed a schedule of bankruptcy, and the Official Assignee, after examination, now claimed that the Repatriation Department had exceeded it= rightunder the bill of sale in obtaining the £107 which was in the bank, and in realising to the extent of £179 on nevr stock, which he alleges was not included in the bill of scale. This amount " r £256. he held, was not subject to any preferential claim by the Department, but should have been available for general distribution among the creditor*. Evidencf was taken to e«tab ,ie ■ exactly what stock and plant Hip Department was legally authorised by the •bill of sale to deal with on May 4, after which legal argument on the right? of the Department as against the other creditors will be heard, Mr. Paterson representing the Department. Tim hearing of legal argument was adjourned for a fortnight.