HOTELKEEPER'S FAILURE.

Press, Volume LXIV, Issue 19260, 15 March 1928, Page 6

HOTELKEEPER'S FAILURE.

HEAVY FINANCIAL BURDEN Hanging tenaciously on to his business in hope that something would ultimately turn up, George Fox Webster, licensee of the Excelsior Hotel, found that his burden of debt was too great, and after filing a petition in bankruptcy, was compelled to call a meeting of creditors to go into his financial position. The total debts were £B7B 15s 2d, all owing to unsecured creditors. There were no assets.

The unsecured creditors were as follows, all being of Christchurch, except where otherwise stated: Powley and Co., Ltd., brewers, £43 12s 6d; Scott Bros., Ltd., £3 5s 6d; Maling and Co., Ltd,, merchants, £3O 10s; Cleary and Belmer, coal merchants, £ll 15s 6d; K. Johnston, coal merchant, £ll 3s 6d; Strange and Co., Ltd., £3 19s; J. and G. Snook, fishmongers, £3O 16s 10d; Mt. Magdala Laundry, £3B 17s 6d; Timaru Brewery Co., Ltd., £3l 5s 6d; Forbes, Ltd., merchants, Lyttelton, £230; Quill, Morris, and Co., Ltd., wine and spirit merchants, £6l 14s lid; J. Wilson, grocer, £4l 3s 2d; St. Albans Brewery Co., Ltd., £6; L. D. Nathan and Co., Ltd., Auckland, £56 8s 3d; N.Z. Breweries, Ltd., £240; Weir, Arcadian Dairy, £9 10s 9d; Horniblow's Motors, £8 12s 3d; Eangiora Brewery Co., Ltd., £3O.

In his written statement to the Official Assignee (Mr A. F. Watters) bankrupt said that upon his return from active service he re-entered the service of the Railway Department until February, 1920, when he purchased, along with Mrs White Smith, a lease of the Sheffield Hotel. They remained there until August, 1922, and upon selling, tho bankrupt's share of the profit amounted to £4OO. From August, 1922, until May, 1923, he did casual work, and at that time his mother-in-law purchased the Wellington Hotel and engaged him as manager at a salary of £5 a week. He remained with Mrs White Smith until the expiration of her lease in November, 1924, and in January, 1925, he purchased a three years' lease of the Excelsior Hotel, together with tho stock and furniture for £4657 lis 4d. He put in £IOOO and tho balance of the purchase money was found by Ballin Bros., to whom he gave the usual securities, and to whom he was to repay at the rate of £BO monthly. The hotel was sold to him on a £3OO weekly turnover basis, and for tho first two years it averaged this figure. However, during the past 12 months of his tenancy, and as a result of the general depression, the turnover dropped to between £2OO and £250 weekly, and he commenced getting behind with his trade accounts. About the beginning of September, 1927, the New. Zealand Breweries issued a writ for the recovery of the amount of £240 due to them and he was unable to carry on and meet his obligations. He placed the position before Ballin Bros, and from September 6th, 1927, to March 3rd, 1928, he had been managing the hotel on behalf of that firm. He attributed his failure to taking on a big proposition with insufficient capital and secondly because of the diminution in the takings of the hotel during the past twelve months, without a corresponding reduction in his expenditure. Asked if the £IOOO he put into the business was all his own, bankrupt said that £3OO belonged to his wife. The balance was his.

The Official Assignee: You were worth £7OO then.

Bankrupt: Yes. Bankrupt stated that the valuation pn the furniture was £1450, and the goodwill £2850. He considered that he dropped 100 per cent, in profits, this depreciation having commenced 15 or 16 months before he closed. He had banked all money, except that which was paid out in wages. He could pro> duce a wages book. Bankrupt added that he had sold his Btock to Ballin Bros., to reduce his overdraft of £750. The Official Assignee: How much did you owo Ballin Bros, at the time they entered into possession of the securities!

Bankrupt: Over £3OOO. And that has been reduced to £400? —Yes.

Questioned by the Official Assignee bankrupt said that about 12 months ago he realised that things would have to pick up. Ho thought at that time that he had dropped £4OO or £SOO out of his £IOOO. He had been going back at the rate of £IOO a month, but he looked to Easter and Eace Week to pick up again, as thoso periods yielded double tho profit of ordinary times. All the time he had been hanging on in the hope that business would pick up. Mr P. L. C. Inder, who appeared for the bankrupt, said that Ballin Bros, were going to assist him into another hotel to give him an opportunity to pay his debts. They were quite satisfied with him and willing to help him. A creditor: They can't do that while he is still'a bankrupt. Mr Inder said that it was proposed to apply for a discharge almost immediately. A representative of Ballin and Co. said that the bankrupt had always carried out his obligations and they were prepared to help him as long as they knew he was doing his best. The meeting was adjourned at this I stage, in order to give the Official Assignee an opportunity of examining the 1 bankrupt's books. No motion was pass|cd.