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Press, Volume LXVI, Issue 19854, 15 February 1930, Page 5

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MERCHANT'S FAILURE.

CREDITORS NOT SATISFIED. The adjourned meeting of creditors in the bankrupt estate of Leslie James Roaclie, merchant, of 179 Hereford street. Christchurch, and George Edward Stokes, merchant, of Dunedin, was held in the office of the Official Assignee (Mr J. H. Robertson) yesterday. There had been two previous meetings, one on July oth, and another 011 August 12th. The , bankruptcy was an involved one and considerable interest was taken in the proceedings. Mr W. J. Sim appeared with the Assignee. At a meeting of Roaches creditors on July sth he attributed his bankruptcy to the fact that he had had to pay off the debts of the partnership (Roache and Stokes) and that he had not received his share of the assets. At the first meetinglfcthe total debts were shown as £2899 12s. Assets including stock-in-trade valued at £79 6s 4d; book debts £1826 10s 3d, estimated to produce £1800; cash in. hand, £9 9s 10d : furniture and truck, £150: and interest in partnership, £BlX>- were valued at £283(3 I (is 2d. This left an estimated deficiency of £62 15s lOd.

The Assignee explained that the meeting of that (lav had been called so that he could report to the creditors what action had been .taken in connexion with the estate and to enable him to [.lace before the creditors a statement of the accounts and to give them an idea of the dividend they might eventually expect to receive. So far as be (the Assignee) was concerned he bad to administer three clitferent estates —that of- L. J. Roache, that of J G. F, Stokes, and the partnership between these two So far as lloache's private estate was concerned, bankrupt bad estimated that tlie creditors would receive neary. 2fu tn the £• but he (the Assignee) had gone very' fullv into all the figures, and his estimate was a dividend of in the £ Ther. was about £B7O wortn of "real'" book debts in the estate and about £2OO of tins amount had been collected ri va te estate of. Stokes was quite a small one. and the deficiency in connexion with it was £96. At the previous meetmfitheGreditors were not altogether satisfied that the assets had been properly dealt with, and it had. been decided that the Official Assignee (Mr. AJ. Watters) should enquire mto matters. The partnership of Roache and Stokes apparently, had been formed October, 1927. at Dunedm. and the partners had carried on as such unt 1928 when both partners considered that' the business should be extended to Christchurch. In April, 1928, the partnership had been dissolved. * was then thought bv the partners that there would be a balance of assets over liabilities, and it was arranged that Roache should receive half. The stock was to he valued and taken over by Stokes. Eventually,- the assets of the partnership, it appeared, had passed

into the hands of Stokes, who conceived the idea of forming a limited liability company to take over the ] concern. A deed was drawn, up where- j by the assets of the partnership were to be sold for £BOO to the new company. The new company carried on and tacked "Ltd." on to the original name, but they found it extremely dif- | fjcult to obtain credit in Dunedin. The new company found itself obliged to pay certain debts of the original partnership, and agreed to pay accounts amounting to £3200 of the old- Partnership. They collected £IBOQ of debts owing to the old partnership. Then a Mr Borrie appeared on the and practically became owner of the company. He invested a considerable sum of money in the company, which eventually went into liquidation, jmu Mr Borrie was said to have lost about £6OOO. The Assignee said that when ne arrived in Cnristchurch as Assignee in pi ape of Mi 4 Watters he looked into the position. After making the fullest enquiries he had come to the conclusion that there were no prospects of the creditors obtaining anything from the private company. Bankrupt was then asked to retire for a time while the creditors, discussed certain aspects of the bankruptcy, in committee. Following this discussion • Roaclie was again called into the meeting.

A "Wild Cat" Scheme. Mr G. P. Purnell said their thanks were due to the Assignee for the very thorough .enquiries he 'had made, and the report he had given them on the case. The creditors were suffering from a "wild cat'' scheme of imaginative men, and so long as such men as the bankrupts were given credit, merchants and others would continue to suffer Mr Nicholson endorsed Mr Purnell'3 remarks. • The Assignee said he did not think that any more assets could be discovered. Mr Nicholson said that the bankrupts had been carrying on business on a tremendous scale, and he did not think that they had kept proper books. To fail to keep proper books was not right.. The Assignee read extracts from the report of Mr H. H. Sykes, accountant, Dunedin, to show that no proper books had been kept by the partners. "The books," added the Assignee, "were totally inadequate." So far as the private business of Roache was concerned, he had seen his books, and found them fairly good. In reply to the Assignee, Roache, said that in "the partnership he had done the organising, and Stokes had assured him that the books were being kept in good order. Mr Sim: But did you not investigate the matter for yourself? Roache said that he naturally took his partner's word for it. The Assignee said that .one partner blamed the other. The Assignee (to bankrupt): Can you tell me how you expected to be able to pay Star Stores £4O when" you incurred the debt? Bankrupt: I was expecting to get the money from Stokes. The Assignee: You were unduly optimistic. This is one of the most unsatisfactory bankruptcies I have had to deal with.

A Motion Moved. At .this stag* Mr Purnell moved; '' That the papers, in the . estate be forwarded to theQrown solicitor; with a view to obtaining his opinion as to the advisability ,of taking criminal "proceedings underthe Bankruptcy Act; and that, in the event of the advice being against such prothe Assignee be instructed to oppose bankrupt's application for discharge from bankruptcy.". The motion was seconded by Mr Wakeley. Bankrupt asked that the motion be postponed until his solicitor (Mr Twyneham) could be present. He was out of town that day. The Assignee said that it would do no good to wait for Mr Twyneham. Bankrupt said he was quite prepared to stand trial, for he had done his best; but he considered 'that it would be quite unfair to oppose his discharge.

Bankrupt's Car. The Assignee (to. bankrupt): Have you got a cart Bankrupt: I had a five-seater Buick, which I gave to my wife. . The Assignee: You bought. it in April, 1928, for £lsOl Bankrupt: Yes. The , Assignee: Why did you give it i to your wife? Bankrupt: She had lent me money at various times, and I repaid my debt to her in this way. At the time I did this I did not know that-1 was going to become insolvent. ' Mr Sim said it was a case of fraudulent preference. Bankrupt said that when he .gave the car to his wife he thought that there would be enough money to pay all his debts. He was at present using the car for his work. He was now earning £3 a week. Mr Sim: Does your wife drive the car? Bankrupt: She drives it, but does not take it out alone.

The Assignee: We will have to consider about the car? The motion was then put and carried unanimously.