IN BANKRUPTCY

Dominion, Volume 18, Issue 195, 13 May 1924, Page 8

IN BANKRUPTCY

LAMBTON QUAY TEAROOMS THREE WEEKS IN BUSINESS A meeting of creditors in the estate of Dlrs. 4V. E. Horan, caterer, Lambton Quay ; was held before Mr. S. Tansley, Official Assignee, yesterday. The creditors represented were: George and ! Doughty, Ltd., Hawke’s Bay Fisheries, Derbyshires, Ltd., Judd and Randle, 44’. 11. Ninimo. IVellington Poultry Farmers, and E. G. 4Varnc. Mr. J. J. McGrath appeared for debtor, and Mr. Putnam watched proceedings on behalf of Mr. Millen. Bankrupt, in her statement, said that on November 27, in partnership with a Mrs. Dargie, she commenced business as caterers and tea-room proprietors. They rented premises at 96 Lambton Quay at £l6 per week, and continued in business there until December 17, 1923. Mrs. Dargie' put m about £4B, and bankrupt put in about £l3O. Bankrupt’s husband advanced her. in addition, by paying accounts on behalf of the partnership, £153 12s. Mrs. Dargie, so the bankrupt stated, incurred many of the liabilities in connection with the business, but when she (found that the liabilities were so great she refused to meet bankrupt or discuss the matter at all. Bankrupt was sued by one of the creditors, and this forced her to file. All the debts were due by Mrs. Dargie as well as by bankrupt. They had no deed of partnership, and kept no bank account. Both signed the lease of the premises. On December 17 last they sold out to Mr. Millen, of Millen and Emerro, land agents, for £250 (after being three weeks in business). He paid £5O cash, and gave a promissory note for £2OO, which was sufficient to pay all tho firm’s creditors in full, with the exception of bankrupt’s husband. Had this bill been met bankrupt would have used the pioceeds to pay the creditors, but Millen dishonoured it, and bankrupt issued a writ out of the Supreme Court for the amount, and the action was now pending. In addition to the sum of £250, Mr. Millen took over stock to the value of £3O os. 9d., but ho had not yet paid for this. These two sums, amounting to £230 os. 9d., represnted the total asset in the estate. Bankrupt attributed the present position to high rental and slackness of business, and the failure of Dlr. Millen to meet his promissory note. Debts to unsecured creditors were shown as £363 15s. 5d., the principal ones being: 4V. J. Horan, £153 125.; Thomas and Co., merchants, £25 16s. 2d.; Derbyshire’s (N.Z. Ltd.), merchants, £2O 9s. Sd.; George and Doughty, drapers, £26 4s. Sd.; Chapman, Skerrett, and Co., solicitors, £l5 18s.; Ninimo and Co., builders, £l2 15s. 3d.; McGrath ana Willis, solicitors, £l7 155.; IVellington Poultry Farmers’ Association, £9 ss. Id. Mr. McGrath stated that bankrupt was only in business for three weeks. It was laigely a case of misfortune. Bankrupt’s husband was formerly an hotelkeeper, out was rendered au invalid through a paralytic stroke, and she went into business to keep things going, but the takings had pot even paid the rent. 4Vhen the business was sold, the whole of the creditors would have been paid had the. promissory note given for the purchase been met, but the note had been met, and legal proceedings were about to be taken against Mrs. Horan. Action had been commenced in the Supreme Court for the recovery of the £2OO. ’Consequently, when the maker of. the promissory note was sued he obtained leave to defend the Supreme Court action. Very reluctantly, Mrs. Horan agreed to filo the petition. He had) no doubt Mrs. Dargie was liable for half the debts. Mr. McGrath said that Dlrs. Dargie’ s solicitors denied that a partnership existed, but ho had no doubt that could easily be proved. Mr. Putnam contended that the whole of the moneys claimed had been paid into Court to enable leave to defend to be obtained. The defence was that the place was represented as earning £lO per week, and afterwards £2O a week. There was no chance of Millen meeting the promissory note or making a compromise. Mr. McGrath said that bankrupt was not able to pa.v the third week’s rent, and Millen knew her position. Millen had sold the furniture and stock of the business, and had not handed over tho proceeds. Bankrupt said the furniture, etc , had cost £350.

In reply to Air. Judd, Air. AlcGrath said that Alillen had bought the lease and contents and sold them., Air. Putnam denied that Alillen had bought the business or sold any of the stock It was his step-daughter who did that. Air. Tanslev pointed out that it was for tiio creditors to say whether the action against Alillen was to go on. Air. AlcGrath promised that Air. Horan would pay his share of the expenses of tlio action. Air. Judd said l e was prepared to put 111 his share of the cost of taking proceedings. Alillen had taken over tho business and sold everything, and surely was liable for the , purchase money. He moved accordingly. Mr. Putnam made it clear that Alillen did not purchase the business for himself Air. Ninnr.o seconded , the motion, which was carried unanimously. In replv to Air. AlcGrath, Air. Putnam declined to facilitate the proceedings bv allowing the notion, to he brought on nt the next sitting. Tie was onlv expressing his client’s determination. As regards the refund of £5O already paid, for which action was being taken, he was acting on behalf of a' different client altogether, the real purchaser of the business. Tho proceeding then concluded. ISLAND BAY GROCER Tho Official Assignee (Air. S. Tansley) presided over a meeting of creditors of Edgar Eaton Alailman, formerly a grocer at Island Bay. The following creditors wore represented:— Aloore, Wilson and Co., Aulsebrook and Co., J. H. AVhitaker and Sou, B. 11. ATayall, Ellis and Manton. Burch and 00~ A. S. Trengrove and Co. , According to bankrupt’s written statement, ho started business at Island Bay handicapped with debts from iiis previous business at Karori, totalling £169 3s. lid- He paid Mr. W. P 'McClure £157 10s. 9d. for goodwill and lense of the Island Bay property, which left him with £67 9s. 2d. cash in the bank. Ho also had a guaranteed overdraft of £lOO, and later he obtained from his Wanganui solicitors a sum of £lOO, which he paid into the business. He put his failure down to being handicapped at the start and his inability to take advantage of cash discounts, and having to pay bank interest. The prices ho had to pay foi goods were higher than the retail prices of other tradesmen. Debts to secured creditors totalled £2OO. and to unsecured creditors £971 4s. Id., the assets being valued at £4lO 16s. The unsecured creditors included: Aloore, Wilson and Co., £645 £s. 3d.; Burch and Co., £157 9s. 5d.; Ellis and Alanton, £56 3s. 3d.; A. S. Trengrove, £29 Bs. 6d.; J. B. AleEwan and Co , £lB 3s. sd. ; B. Goldstein, £l5 3s. id.; J. H- Whitaker and Sons, £l3 Is. lOd. The secured creditors wore: P. E. Tingey, Wanganui,

£B7 2s. 3d.; Treadwell, Gordon and Brodie. Wanganui, £lOO.. . In answer to the Official-Assignee, bankrupt stated that he had paid oft his Karori creditors out of the proceeds of the business at Island Bay. He paid £3 10s. a week rent at Island Bav, and sublet the top floor for £l 13s. 6d. He paid his daughter £1 a week wages and took £2 15s- % week out of the business for himself. In answer to Air- AValker (who represented a creditor), debtor said that he did not think he made 17 per cent out of the goods sold. He could not give detailed particulars of Ins household expenditure. . Mr Walker said that the books showed a loss of_£493, and the total loss was about £7OO. Debtor said that he had consulted his solictors and decided to carry on. Had he not been sued he believed hs would have been able to pay his crediTn reply to a creditor, the Official Assignee 'stated that debtor’s action, in carrying on after he had ascertained he was bankrupt was a breach of the Bankruptcy Act. Air Walker explained that bankrupt was allowed to carry on because he was so confident ho would bo able to reduce his indebtedness. . In replv to tho Official Assignee, bankrupt said he had not got a shilling and was at present working on the - wharf. . , The Official Assignee said that the bankrupt did not know how ho was doing and did not care. Air Walker contended that the leakages in tho cash in such a small business could only. have taken place through sums being taken out of tho cash daily. Several creditors suggested that an expert accountant should be asked to examine the books. Mr. Burch moved that the books and accounts be submitted to an accountant, and if the result was not satisfactory a public examination be heldAir. Moore seconded the motion, which was carried. The Official Assignee was authorised to call for tenders for the stock, which was valued at slightly, over £2OO, and the lease of the premises. The meeting was adjourned sine die.