BANKRUPT RADIO DEALER SHOWS DEFICIENCY OF £7859

Press, Volume C, Issue 29701, 20 December 1961, Page 22

BANKRUPT RADIO DEALER SHOWS DEFICIENCY OF £7859

A deficiency of £7*59 Is 2d was shown in the statement of affairs of Boyland John Dunford, trading as Hoyle Radio, radio dealer, read to a meeting of his creditors yesterday by Mr D. Malcolm, agent for the Official Assignee (Mr O. T. Grattan). Dunford was adjudged bankrupt on December 5. The amount owing to unsecured creditors was shown as £8793 8s 6d, said Mr Malcolm. The amount owing to secured creditors was £1696 and the estimated value of the securities was £2124 2s 6d. Dunford's debts totalled £8793 8s 6d. and bis assets £934 7s 4d. leaving a deficiency of £7859 Is 2d. Mr Malcolm said there were contingent liabilities amounting to an additional £3005 ss. These were amounts guaranteed under hire purchase agreements. Causes "Since commencing business at 808 Colombo street in 1953 I have never been free from the difficulties inherent in a stringent shortage of working capital. I have endeavoured to overcome this by long-term borrowing from a relative (interest free) and short-term borrowing from several other sources, and these latter have involved me in the payment of very high interest charges over the years,” said Dunford in a statement on the causes of his bankruptcy.

“My commencing capital as shown in my balance-sheet at March 31, 1954, was only £166 and in that year I made a loss which together with my personal drawings made a total deficiency of £741. In the following financial year I acquired a second shop at 83 Cathedral square and was able to make a profit of £571. my deficiency reduced to £646. In the following year which ended on March 31, 1956. I made a profit of £l2ll which converted my deficiency into a er dit of £74 and in the following year with the help of a profit of £1914, my capital account grew to £973. At that stage, however, I was depending on loan capital amounting to £4302. Turnover Drops

“In the 1958 year I disposed of the premises in Cathedral square, and my capital account was increased by £2700, being the realisation of the goodwill of that business. I also made a net profit of £1271 in that year,

which brought my capital, after allowing for private drawings, up to £4411. This my position had steadily improved, tout from thia point on, my position showed rapid deterioration, I was then operating from the shop at 808 Colombo street, and I had opened a branch in Reefton. The Reefton venture was a most unfortunate one and never prospered. The Colombo street shop was not well situated for a business of this type, and Christchurch turnover dropped from £20.288 in the 1958 year, to £8367 in the following year. “Without doubt the sale of the shop in Cathedral square was disastrous, in spite of the temporary advantage it produced, because in the year ended March 31. 1959, I incurred a net loss of £1368. In the following year, which ended on March 31. 1960. I vacated the shop at 808 Colombo street, having previously opened a further branch in the premises which I have occupied until the present time at 133 Manchester street This move involved me in a total liability of £3600. made up of goodwill, £l6OO, and furniture and fittings, £2OOO. This sum was to be met on deferred terms with interest at 6 per cent., and I paid a deposit of £lOOO and subsequent instalments amounting to, I think, about £l2OO in all. I can see now that the contract price for the acquisition of the Manchester street shop was very much too high. "I had to close the Reefton business during the year ended March 31, 1960, and for the year I incurred a net loss of £1915 which converted my capital account into a deficiency of £44. Accounts for the 1961 year have never been completed. Car Dealings “In an effort to assist my financial position, I engaged in some dealings concerning motor-cars in conjunction with a Mr L. Holden. He was indebted to me to the extent of £3OO for moneys advanced, and a further quite substantial sum for a radiogram which I supplied to him. He also owed me other moneys relating to car dealing. “To finance the purchase of goodwill and fittings at Manchester street, I borrowed £l6OO from a money-lender during the year ended March 31, 1960, this amount bearing interest at 24 per cent, per

annum, and I have not been able to effect repayment, with the result that there has been a very heavy interest charge to meet for a considerable period. “I can truthfully say that I have put all my energies into thia business and also *U available financial resources. I do not drink to excess or gamble, and my personal living expenses including taxation in seven years to March 31. 1960. averaged only £B6O per annum." said the statement. Dunford, replying to questions by Mr Malcolm, said he was born in 1911. He said he sold 31 television sets from the Manchester street premises. At a guess, 60 per cent, to 70 per cent of time payments would be good. Some of the remaining 30 to 40 per cent, would be difficult to collect. It was not until very recently that he realised he was insolvent He was on sick benefit at the moment “I have not functioned in the business for five weeks,” Dunford said. A creditor said he had been 100 per cent satisfied with his dealings with Dunford, who had peed until he become sick. The meeting was adjourned sine die.