LOSSES UNEXPLAINED.

Auckland Star, Volume LVI, Issue 190, 13 August 1925, Page 10

LOSSES UNEXPLAINED.

BANKRUPT GROCERY BUSINESS. MISREPRESENTATION ALLEGED BY CREDITORS. FURTHER INVESTIGATIONS. Failure to explain the disappearance of some £500 of his losses of £1400, which had been accumulated during a period of a little over 24 years, led to a meeting of seven creditors to-day, complaining that the action of Leslie John Mullaney, grocer, of Hobson Street, bankrupt, during tho last twelve months, was a case of deliberate misrepresentation. Mr. \V. S. Fisher (Official Assignee) agreed that the bankrupt had not accounted for a large portion of his losses, and questioned him closely upon his transactions, without obtaining a complete explanation. Bankrupt's schedule showed that his liabilities to unsecured creditors were £1537 19/4 and his total assets amounted to £185 17/0. including £30 book debts and £155 17/0 cash in hand, leaving a nominal deficiency of £1352. In a written statement bankrupt said he commenced business at the beginning of 1923, paying £400 as purchase money, in an overdraft from the bank, backed by a guarantor. A sum of £200 was paid for the goodwill of the business, which, combined with the interest charges, made it impossible to put it on a sound basis. A misfortune in the first year was a burglary, resulting in a loss of £80 in cash and goods. Family sickness followed, and later hankrupt increased his overdraft to £000. The interest charges comprised 7i per cent to the bank and £5 every 28 days to the guarantor of the overdraft. Bankrupt made every effort to sell and so save himself, but was unable to dispose of his business. The Official Assignee said that the creditors knew what was done, as the result of private meetings on the eve of bankruptcy. Examined, the bankrupt said lie had been in business most of his life as a grocer. He had been about three years in the grocery department of the army, but he had never been in business on his own account before. Ife had saved nothing while working on wages. That was because he contributed from £00 to £100 a year to the support of his mother and sister. To start the grocery business, bankrupt was granted accommodation of £400 on the security of a guarantor, and agreed to pay £4 0/8 a month. The monthly payment was later increased to £5, and the accommodation to £000. During the last twelve months bankrupt had made payment of £102 for interest. Bankrupt said he had gone into his position on frequent occasions, and about last March or April he found he was insolvent. His position then was very much the same as at the time of the bankruptcy. That, showed him to be somewhere near £1400 to the bad, including the amount owing to the bank. Mr. Fisher: What explanation can you give your creditors of your losses of about£l4oo in the last 2.f years. Expenses Through Sickness. Bankrupt: I .started business with no capital, and it cost £300 in interest on borrowed money. I was almost even at the end of the first twelve months, but after that I had heavy expenditure on account of sickness in" the family. The total would be about £80. A further liability was for rent and wages, amounting to about £370. One creditor said that he had been selling supplies of eggs to the bankrupt since March, and had been assured on several recent occasions, that everything was alright, but he had not received payment. Another creditor said that bankrupt had assured him that he had something like £400 coming to him. and he would be able to meet his liabilities. This was admitted by bankrupt, who said that he wanted extended credit, and was "fighting" for an old family legacy, which was supposed to come to him from an estate on his mother's side in England. Questioned by the Official Assignee he admitted that there were about half a dozen people between him. and the legacy. A Creditor: Have you been to the races ? Bankrupt: Only twice in my life in Auckland. Hie writing had been seen in some race books in his place. Bankrupt: There were miles of race books there. They belonged to someone who was there before mc. I made some of the entries for him because he could not write. Several creditors expressed themselves dissatisfied with the bankrupt's explanation of his losses, one commenting that the losses had been at the rate o? more than £10 a week. Another said that bankrupt had not put his position candidly before him, but. had resorted to "lying and misrepresentation.' , i It was decided that an accountant's 1 report upon the books and accounts be obtained for consideration at a sub- > sequent meeting. . i