STOREKEEPERS' FAILURE.

Auckland Star, Volume LIX, Issue 232, 1 October 1928, Page 5

STOREKEEPERS' FAILURE.

COUNTRY TRADER'S TRANSACTIONS.

£200 FOR CREDITORS.

That he had obtained credit after he found he was insolvent was admitted by David Jolrn Elston, storekeeper, of Waiau Pa, whose creditors met in Auckland to-day. Debtor declared that he had no intention to defraud. His solicitor (Mr. Finlay), said he had been very frank and open about the whole affair. After some discussion it was decided to accept an offer for the payment of £200 cash in a dividend with a special clause in regard to the claim of debtor's father-in-law, from whom Els ton's shop had been rented. The financial statement showed a deficiency of £418 15/7, claims of unsecured creditors amounting to £945 8/6. Assets, which included £211 12/11 cash in the bank, totalled £526 12/11; book debts being estimated to produce £526 12/11. Bankrupt said he started in business at Waiau Pa in 1926, having had no previous business experience. His capital consisted of £200 of his own, together with a loan of £241 made to him by his father-in-law, of which £116 had been repaid. A good deal of the stock he took over was found to be unsaleable and a second-hand motor track which he bought turned out to be a very bad investment. Money did not come in as he expected, and at the end of the first milking season he was left with £43 in bad debts. In March, 1927, when he started a fresh set of books, his position was satisfactory and he was solvent, but he was put to heavy expense owing to the birth of a child, and the drought caused a bad season in 1927. In June, 1928, he took stock and made out a rough balance-sheet, finding that he was insolvent. He decided to sell and realise as much as he could for the stock. He carried on business and sold out in August last. "I can honestly say that I acted in good faith," continued Elston. "I did not realise I was committing a grave offence in not letting my creditors know I was insolvent." He had prospects of a job and he was prepared to do all he could to pay off his liabilities. Questioned by the Official Assignee, debtor admitted that he. had obtained further credit between the time when he discovered he was insolvent and when he sold out. Answering a creditor, he denied having represented that his only liability was the motor truck and that the business belonged to his father-in-law, from whom he rented the shop. The Official Assignee said it was clear that three or four creditors had been prejudiced by debtor carrying cm when he knew he was insolvent. Finally the meeting decided to accept the offer for the payment of £200, as a dividend of 6/8 in the £.