HOTELKEEPER BANKRUPT.

Auckland Star, Volume LVII, Issue 161, 9 July 1926, Page 9

HOTELKEEPER BANKRUPT.

BUSINESS IN GUM COUNTRY.

CAUSE OF FAILURE.

A meeting of creditors of Percy Michael Mills, hotelkeeper, of Waipapakauri, North Auckland, was held this morning, Mr. W. S. Fisher, the Official Assignee, presiding. Bankrupt's total assets were estimated at £7130, including a property of 100 acres at Waipapakauri, together with an hotel of 18 rooms, a general store, bakehouse, and a four-roomed cottage. These latter he represented as being worth £4f>oo. The remainder represented improvements to building £1000, furniture and fittings £1000, book debts £300, and live stock £170. His liabilities were £0502, of which £1864 was due to unsecured and £3938 to secifred creditors. In addition there was £700, made up of various small amounts, including £300 for wages. The hotel property had einee been sold to satisfy a mortgage, the amount received being only sufficient to pay the two secured creditors.

Bankrupt in his statement eaid that his present position was due to the decline in the kauri gum industry. The place was in a "hopelese state and out of repair" when he and his wife took it over, and the Licensing Bench demanded extensive alterations. They were unable to borrow any money for the improvements, and the mortgagees did not render assistance. Mrs. Mills and bankrupt had to go to the expense of several trips to Auckland to try to arrange finance, without result. Under examination bankrupt stated that he tad been hotelkeeping for 1"> years, and that this was his fourth house. He had £1150 equity when he took over the Waipapakauri property. This he gave in part payment. He had £200 cash and £200 which he had borrowed. TJT-β money had been used for carrying on. When bankrupt purchased the takings were at an average of £85 per week. That meant a profit of £40 to him. This state of affairs kept up for seven or eight months. It was during October. 1922, when he went there. Trade gradually went down on account of the gum diggers not being able to sell gum. The hotel had paid fairly well for the first twelve months. Bankrupt said he had lost £3914 in about two and a half years. The Assignee: How was that? Were! your private expenses heavy? Bankrupt: So. My p-ivate expenses last year would not come to more than £20. Mrs. Mills had to come to town and go to Wellington on business connected with the hotel. The Assignee: Go to races? Bankrupt: No. I've been on Ellerslie course once. The Assignee: Where has the money gone? Bankrupt: Into the buildirg. Overhead expenses have been very heavy. The Assignee: But you haven't paid them. You can't account for leakage in any way? Bankrupt: Not for such a big leakage. The Assignee: Have you been paying out wages at all? Bankrupt: Yes. To eight people. The Assignee: You have paid five of them right up. and owe one £160. another £100, and a third £40. How is that? Bankrupt: I paid them when they left. The Assignee: Well, they must have been lucky. Speaking to creditors, the Official Assignee said: It seems to be a pretty hopeless position. On the suggestion of Mr. Fisher it was decided to appoint a committ€e to go into bankrupt's affairs to see if creditors could get anything out of the estate. The committee was given full , power to act.