BUTCHER FAILS.

Press, Volume LXV, Issue 19726, 17 September 1929, Page 9

BUTCHER FAILS.

£1582 IN ARREARS. COMPETITION AND HIGH STOCK PRICES. William Henry Kerr has carried on business aa a butcher in Cashel street, Linwood, for the past 22 years. For the last five busi-_ ness had not been good, mainly due to competition and high "prices of stock. Four years ago auctioneers made him pay cash for his stock. He kept very. incomplete books and could not tell his position and sought the aid of moneylenders. Matters became worse and after two private meetings of creditors he filed and met them again yesterday owing £1582, about £9OO of which was due to moneylenders. The total debts were shown as £2116 0s 9d and the assets at £033 2s 6d, leaving a deficiency of £1582 18s 3d. Secured creditors were shown as £1397 lis Id. The principal assets were: Stock in trade £l3O, and surplus for securities, in the hands of the secured creditors £252 8s lid. The principal unsecured creditors 'were: F. D. Kesteven, £875 : E. W. Irvine, £340; W. S. Wootton and Sons, £127 12s: g. Marchant, £150; New Zealand "Farmers' .Co-operative, £163 10s 3d ; Canterbury By-Products, £97 ; F. C. Raphael, £231; E. Timms, £7O; New Zealand Refrigerating Co., £SO 7s 7d; H. Berry and Co., £36 10s; M. A. Pattrick, £27 10s. The Ciiristchurch Building Society was secured for £B-50, E. Irvine for £2OO, F. N. Kerr £250, and Bank of New Zealand £97 lis Id. Bankrupt, in his sworn statement, said that for a period of 22 years he had carried on business as a butcher at 573 Cashel street. Hte had had the usual amounts of ups and downs, and prior to the last five years he had had a fairly successful time in a small way. He had never lived in luxury and had always worked himself. About six years ago he l»egan to feel the effect of opposition. Unfortunately, he had not known, for approximately six years, how his financial position stood. He kept only a summary cash book in which all the sales were entered. This book was fairly intact, but he had not made any summary of it, and did not calculate his position from day to day or even from year to year. Abour four years ago various firms of auctioneeis took notice that bankrupt had too much money on their books, so they told him that all purchases in future must be on a cash basis. Bankrupt then went to Mr Kesteven and borrowed temporarily £SO for a few weeks, thinking he would be able to get himself right. However, he did not do so. Mr Kesteven carried him along until he was owing him approximately £4OO, on which he was paying £8 a month interest. Things began to brighten up • little, but bankrupt was still carrying this debt. When the next dear market came along bankrupt got another £250 from Mr Kesteven. He was then owing him approximately £650. He was paying nim £2O » month interest for perhaps two years. Hte later reduced the interest to £lO a month, but this was only approximated six months ago. Bankrupt borrowed other money from various friends, not thinking how the whole position was going to finish up. t • Mr Kesteven, on one occasion, mentioned that bankrupt was borrowing too much, and not liking to borrow more from him, bankrupt went to Mr Raphael. He was onying interest to the moneylenders and his friends and to the By-Products Company he was

paying £2l a month, refund of principal and interst, at 84 per cent., ana he neglected iiis legitimate bills. kept all financial matters to himself and never once asked anybody's advice. The high price of stock during the last two years brought things to a head. Bankrupt had not been extravagant and was not a gambler or drinker. * five months ago, when, being pressed by his creditors, he interviewed bis solicitors, and they advised him to put the whole position before his creditors. A meeting of creditors was called and it was. decided that all creditors would stand down for four weeks to see exactly how his business was. A joint :ind several guarantee was prepared, the guarantors guaranteeing £IOO. All money business was transacted through the Bank or New Zealand. The guarantors were appointed supeivisors, and all cheques were to be signed by bankrupt and countersigned by'Mr Fee, the accountant, who was looking after the books. It was decided also that the guarantors have a preferential claim to all unsecured assets. Another meeting was called after, a, lapse of four weeks and it was agreed to allow him to carry on for a period of three months under .the. same conditions. At tne end of three months the meeting was held and it was shown by the balancesheet that it was impossiblo to allow him to carry on any further. During three months when he was carrying on under the supervision of the guarantors he had reduced his staff, but even then he bad been unable to make a 1 1?" thing of the business. During the last 18 months, before his meeting of creditors, he paid the following sums in interest: Kesteven, £2OO, Raphael £2OO, Canterbury By-Products £231 (refund principal and interest), friends £62 10s; total, £693 10s. he was paying about an average ,<of £6O a, month in interest. Mr Watters said they had not been able to discover if the d^wellmg # _apaVt from the shop, could be sold. If tnis could be done there might be a email ■surplus—but only a small one—for; tbe creditors. The residence was in firstclass order. The mortgages would amount co over £I3OO with the lnt *? r ": est. It was liot very satisfactory, A® added, to find that the bankrupt had got behind to such an extent without his -knowing how he stood. He must have been almost insolvent when first he borrowed money from tne moneylenders, and payniento heavy interest had brought him further said he knew be had, been lax in not having a balance-sheet taken out for such a long period. Mr J. A. Flesher, who appeared for one of the creditors, said that a debt of £9OO was due to moneylenders jesides what he had already paid them-^ Bankrupt: That is so. It i« no wonder that I came to grief, is itr* Mr Flesher: No, it was not. One creditor said that four creditors, in Mar, guaranteed £IOO for the carrying on of the business, it being understood that they would have preferential claim on the assets m the event of filing, so as to relieve them of personal meeting endorsed this and tb«n | adjourned.