DEFICIENCY OF £2400.

Press, Volume LXIX, Issue 20906, 13 July 1933, Page 3

DEFICIENCY OF £2400.

HOTELKEEPER MEETS CREDITORS. BUTCHERS' STRIKE BLAMED. Loss of trade following the strike of butchers at the Kaiapoi Freezing Works was one of the reasons given for his failure in a statement presented at a meeting of his creditors yesterday by John Daniel Henry McCurdy, formerly proprietor of the Pier Hotel, Kaiapoi. Bankrupt's statement of accounts showed a total deficiency of £2470 10s lOd. The amount owing to unsecured creditors was £IOO 17s Id, and to secured creditors £6579 13s 9d, less the estimated value of securities, £4163 10s. The assets were valued at £36 10s. In his statement, bankrupt also referred to an alleged misrepresentation about the takings of the hotel at the time of its sale to him. McCurdy was represented by Mr E. A. Lee, and after he had been questioned by the Official Assignee (Mr J. H. Robertson), who presided, the estate was left in the assignee's hands. Statement of Affairs. McCurdy set out in his statement that on June 5, 1931, he purchased the freehold of the property at Kaiapoi, known as the Pier Hotel, from Mrs Annie Maud Hawken for £7OOO. The purchase price was satisfied by his taking over of the existing mortgage on the property and executing a fresh mortgage for £906, the remainder of the purchase money due to. Mrs Hawken, after he had paid £550 cash on account of the purchase price. The mortgages on the property at the time were a first mortgage to the United Building Society for approximately £2500, a second mortgage to Ballin Bros., Ltd., for £IOSO, a third'mortgage of £1540 to Herbert Charles and Anna Watson, and a fourth mortgage to Annie Maud Hawken for £906. In addition chattel securities were given to Ballin Bros., Ltd., securing the principal sum of £725, plus advances to £750 under the guarantee by Ballin Bros., Ltd., to the National Bank and also under promissory notes totalling £7OO, which were given by him to Mrs Hawken to cover the purchase price of the stock and furniture, and which were endorsed by Ballin Bros., Ltd. Payments due under the first mortgage amounted to £23 16s a month, including interest and principal. Payments due under the second mortgage amounted to £l6 a month, and the bank overdraft was to have been reduced by payments of £24 a month.

When the hotel was purchased by bankrupt the takings were represented as being not less than £BO a week, with 80 per cent, profit. From the time he took possession it was discovered that the takings were less than had been represented, and an action for damages was brought against Ballin Bros., Ltd., in respect of the representation as to the takings. The sum of £2187 10s was awarded to bankrupt by way of damages, and this amount was offset against amounts due by him to Ballin Bros.

Affected by Strike. "The takings from the hotel were seriously affected not only by the economic conditions, but also to a great extent by the butchers' strike in the freezing works at Kaiapoi. Because of this strike very few local men were employed in the works, and those employed from outside did not spend their money in Kaiapoi. It is estimated that the takings would have increased by 25 per cent, to 30 per cent, but for the strike." Although substantial damages were recovered in the action against Ballin Bros., Ltd., bankrupt still found himself with heavy commitments, and with the decreased takings he found it impossible to maintain his payments under the mortgages and the chattel securities. An application for relief under the mortgage to Watson was made, and some relief granted. A further application was taken to the Mortgagors' Relief Commission, but was dismissed, since the commission reported that relief in respect of certain mortgages would not assist bankrupt when other mortgagees were free to exercise their legal rights. Following the dismissal of bankrupt's application a bankruptcy notice was issued against him by the third mortgagee. When the notice was issued, negotiations were entered into with a view to obtaining a release of Mrs Hawken's mortgage, as it was found that financial assistance could not be obtained so long as Mrs Hawken's mortgage was on the property. as she was free at any time to exercise her rights under the mortgage without restriction. If bankrupt's responsibility in respect to this mortgage could have been discharged, arrangements could have been made for the payment of other amounts due under prior mortgages, and the hotel carried on. Bankrupt was a married man with six children, four of whom were dependent on him. Two had been assisting in the hotel without wages. Bankrupt's personal drawings from the business had averaged about £1 a week. He had no prospects and was unable to make any offer to his creditors.