BANKRUPTCY OF BUILDER

Press, Volume XCIV, Issue 28025, 20 July 1956, Page 10

BANKRUPTCY OF BUILDER

Deficiency Of £2485

METHOD OF OBTAINING CREDIT CRITICISED

The manner in which Geddes Allan Horgan, formerly of Oxford, builder, and now of Rotorua, had obtained credit was criticised by a creditor when an adjourned meeting of creditors was held at the office of the Official Assignee (Mr G. W. Brown) in Christchurch yesterday. H org an was adjudged bankrupt on June 29. A committee of three creditors was set up to arrange for the disposal of Horgan’s plant at Oxford. The creditors first met on July 11, and the meeting was adjourned until yesterday to enable Horgan to be present, and to prepare a statement of The total debts amounted to £7257. and the assets to £4772, said Mr Brown. ... Giving reasons for his bankruptcy. Horgan said he started in business in a small way in 1945. The business grew very rapidly, and was mainly operated on credit. Through inexperience in financial matters, and because he did not realise that sound financial backing was most important, he was forced into a method of “hand-to-mouth” trading. “The shortage of various materials at the time made me take more and more work to keep the men employed. Later I purchased plant to enable me to manufacture my own joinery, thus increasing the capital outlay. I thought matters would right themselves with increased work,” said Horgan.

The business was beginning to “come right” when a number of things set it back, said Horgan. The first was when he was involved in a car accident and had to pay £l5O damages and £6O for repairs to a car. “Shortly after this, one of my employees converted a truck and. while driving it. killed a man,” said Horgan. “The truck was severely damaged, and was off the road for about six months. Just before the accident, £l5O had been spent on the truck. I also lost the services of two men who were in my employ.

“This final incident set my business back to such an extent that it had little chance of recovery. I realised I could no longer carry on, and assigned my estate for the benefit of my creditors. When the factory was closed up at Oxford, I had to shift to another district to obtain work.” He was married, with five children, four of whom were dependent upon him. He was earning £l4 10s a week and up to £lB with overtime, said Horgan. Bankrupt Cross-questioned Asked by Mr Brown why he did not give the complete list of creditors when he assigned his estate to trustees in August. 1954, Horgan did not reply. Mr G. E. Koller, an accountant, of Rangiora. gave details of debts for such things as household supplies which were incurred by Horgan without the permission of the trustees. Horgan said he did a number of small jobs which were not known to the trustees, V u t the proceeds were subsequently paid into the estate. He admitted that no income tax returns had been made after 1952. He had borrowed £250 from a man to complete a school job without disclosing that his estate had been assigned to trustees, said Horgan under cross-examination. “Had we known the true position when we took over the estate, there would have been only one course of action.” said one of the trustees. When the estate had been taken over by the trustees, it was thought that there were sufficient assets to meet the debts in full, but there were a number of creditors whose names had not been disclosed, said Mr Brown. Later, it was reported that a dividend of 15s in the £ might be paid after the completion of certain contracts. The main assets which remained were the property and section at Oxford, and a truck. The dividend was not descernible at the moment.