DEBTS £1882.

Press, Volume LXVI, Issue 19889, 28 March 1930, Page 10

DEBTS £IBB2.

OIL COMPANIES SUFFER. PETROL STATION PROPRIETOR FAILS. Attributing his failure to excessive rent and price-cutting, Frederick John Crawford, petrol station proprietor, of 17 Thames street, St. Albans, was subjected to a lengthy cross-examination yesterday, at a meeting of his creditors. There was a large attendance of creditors, and Mr J. H. Robertson, Official Assignee, presided. Mr T. Millilcen represented bankrupt. In his sworn statement, bankrupt said that he was a married man with two children. He commenced business as a petrol station proprietor in June, 1907 Ho took a lease of a bowser sta lion at the comer of Moorhouse avenue, and Lincoln road from Oasis, Ltd. lli. rent was £26 per calendar month, lie was at this station about a yeiir fore taking over the lease, and he was paid £8 per week by Oasis Ltd. Ho had £26 to commence with. The stocK he purchased from Oasis, Ltd., at valuation for £146 18s 6d, and he was to pav for it as he went along month!}. Bankrupt kept his own b° ok ® first two years. He put down the cas sales every day, and the credit sales were carried to a ledger on a card system. He paid all cash takings into the bank, and all amounts were paid by cheque.

A Cut in Prices. About six months after he started petrol prices were cut by the retailers. After he had been going two years he engaged a Mr Swann to take out a balance from his books. This was supplied and showed a deficiency of 6s Bd. He said "Things are not brilliant, but if this cutting stops you will be all right." This was about August, 1929. To relieve the position he borrowed £350 from his mother, and offered this in payment of his accounts. He thought at this time that if the prices would return to normal ho would be able to pay in full. Bankrupt realised in. February that his position was getting worse. He approached Mr D. Eeeso on the subject, and the latter advised him to call a meeting of his chief creditors, and place the position before" them. He called a meeting in February, and placed a rough statement before them. It was decided that Mr C. W. Evans be appointed to investigate the position. In the meantime ho was .to carry on and pay cash for all petrol bought. From this meeting Oasis, Ltd., agreed to reduce the rent to £4 10s a week, and bankrupt reduced his wages to £6 a week. About a fortnight later Mr Evans' investigated his position, and found it hopeless. H« immediately filed. Bankrupt attributed his loss to the excessive rent he was paying. It should have been nearer £3 a week. On top of this, made it very difficult to show a profit, but it was expected every month that the prices would go up. He incurred another big loss by not being able to obtain the special discount, and a lot of the petrol was sold at cost price. 4

Financial Statement. . Assets were given as £SBB 2s 4d (stock-in-trade £63" 14s 9d, book debts estimated to produce £275, cash in hand £3O 2s 7c!, motor-car and plant £lO5, furniture £1 ss, other property, £75, 542 shares in Oasis, Ltd., £IOB, less preferential to Oasiß, Ltd., for rent £65). The debts were as follows :■ Amount owing to unsecured creditors £1787.9s 7d, secured creditors £240, less estimated value of securities ,;£144 12s; total £IBB2 17s 7d. The deficiency was thus £1294 15s 3d.

The principal unsecured creditors, of whom there were 26, were as follows: Vacuum Oil Company, Ltd., £lO9 6s 9d; A. S. Paterson and Co., £153 7s 2d; Shell Oil Company, Ltd., £589 9s Id; C. C. Wakefield and Co., oil merchants, £BS 13s.lid; Canada Tyre and Rubber Company, £B4 18s lid; Atlantic Union Oil Co., £l9l 17s 4d; Mrs E. Crawford £320; National Bank of New Zealand, Ltd., £154 19s 6d; Oasis, Ltd. (in liquidation) £65. Representation at Meetings.

Mr Robertson said> that apparently a practice had grown up in Christchurch of solicitors appearing for' creditors without any proxy to substantiate their claims to be presnet in such capacity. He would have to insist on the production of a power of attorney or somo other authority in support of their appearance. Not one of the creditors was properly represented at the meeting. No firm or creditor could be represented merely by sending along one of its employees. He should have some document, either a proxy or power of attorney, enabling him to vote. Not one of those 'present had produced such a document. "That is the correct procedure, Mr Lascelles, is it not?" asked Mr Bobertson. : Mr,Lascelles: That is,the strict interpretation. It means going to the trouble <of filling in forms. The Official Assignee said that if the bankrupt's solicitor protested that the meeting was informal his objection would have to be sustained. Mr Milliken might do this. Mr Lascelles: Oh,,be won't do it. Mr Robertson: I don't expect he will. I'll allow the. meeting to, proceed.

Bankrupt's Explanation. On oath, Crawford said he had surrendered all his assets, and had not removed or concealed anything. The statement was a full and frank one. He had no property in .'the name of anyone else. Hitherto, he had had no financial trouble. In answer to further questions by Mr Bobertson, be said ho was not skilledin the. motor trade, biifc he had had some experience of vulcanising, having conducted such a business for two years. He went into the petrol station business with his eyes open, but he had a liability for shares in the Oasis, Ltd., which he subsequently paid off.

Bankrupt explained his book-keeping system. He took out his first balancesheet two years after he started. ' Mr Bobertson:-You should have done so earlier.. This seems rather unusual. Can you tell your creditors why you did not disclose all your liabilities to Mr Swann.

Crawford: It did not occur to me that the shares were a liability. What about these other debts, amounting to £2541-—I told Mr Swann all he asked me.

The -Official Assignee:. It looks to me tljat the greater part of the damage occurred in the first two years. You were drawing £514 a year, out of the business. Don't you think that was excessive, alnd unfair to your-creditors? You were negligent in your business? —Yes, I admit all that. .

Did you advise the big oil companies from which you were dealing, of your position?— No. ! , Crawford added he lost all his discounts.

•How is the price of benzine fixed? —lt is not fixed. It is everyone for himself.

. They are. cutting one another's throats all the time?— That is so. Mr W. J. Somervell said that Mr Crawford was the oniy proprietor who had failed. The position was improving,

and several stations had been sold recently. The men going in had quite substantial assets. "Treated Creditors Evenly." In reply to Mr Robertson. Crawford said he had had only one summons issued against him. He had treated his creditors fairly evenly in the last three months. He did not gamble, and his drawings were to cover the ordinary expenses of living. He did not appropriate any money, from the business which did not appear in the books. Mr Somervell said Crawford had convinced his company. that he was in a sound position; that was how he Obtained so much credit from the Shell Company. Mr Robertson said Crawford had been drifting on and on. Mr Evans, who drew up a report on the books, said it . was exceedingly difficult to obtain information from them. The book-keeping system was not all it be. Bankrupt said some of the book debts would ; be perfectly good. Mr Somervell: Did you think your station was a good one?—Tes, I did. Do you live very extravagantly?— No. You have not been mixed up with ft man in the trotting world?—No, I went to tie trots only once last year. The Official Assignee said he was not entirely satisfied that the bankrupt had got into his position through misfortune, or the conditions of the trade. It seemed plain that Crawford had carried on longer than he should have. Mr W. M. Ross said it was of no use crying over spilt milk. His company, the Atlantic Union Oil Company, had beon told by Crawford, in December, that he could pay his debts. Mr Milliken said the oil companies had let Crawford run on in the hopo that matters would right themselves. . Mf Robertson suggested that a committee be set up to go into Crawford's affairs and call another meeting, if it was thought necessary. Mr Milliken said it was well known that the petrol business was in a bad way, and that there had been quite a number of private assignments by bowser proprietors. He thought any further investigation would only prolong the agony. The bankruptcy was left in the hands of the Official Assignee, to make further investigation if such is considered necessary. Realisation of the assets was left to the Official' Awriffnao. •