"BIG LEAKAGE"

Evening Post, Volume CV, Issue 124, 28 May 1928, Page 10

"BIG LEAKAGE"

. — » A BUSINESS FAILURE LOSSES OX CITY GARAGE A meeting of creditors in the estate of George Stanley Chisholm, garage > proprietor, Wellington, was held at the offlco of the Official Assignee (Mr. S. Tanslcy) to-day. Mr. T. C. A. Hislop appeared on behalf of the bankrupt. The amount set down as owing to unsecured creditors was £1250 14s 4d. The stock-in-trade was estimated at £50; book debts estimated to produce £.150; property, £300; total assets, £500 10s Id; deficiency, £750 4s 3d. TUe principal unsecured creditors were:. W. Appleton, £190; Macquarrie, Ltd., £37; Williams and Adams, Ltd., £14; Bothune and Hunter, £20; Briscoo and Co., £10 17s; Goodrich Silverton Tires, Ltd., £11 3s; wages set down at £62; British Imperial Oil Co., £137; A. S. Paterson and Co. (Big Tree department),-. £67; John Chambers and Son, £50; Empire Oil Co., £40; Dominion" Trading Co., £50; Combined Buyers, £69; Inglis Bros., £20; Niven and Co., £32; Texas Oil Co., £31; Hatric'kand Co., £27; H. O. Wills, Ltd. (Auckland), £18; Twigg, Ltd., £19; and Ramsey Wilson, £22. In his sworn statement, the bankrupt said that he commenced business thirteen months ago with a capital of £100. He had no special knowledge of the motor business at the outset, but as the garage was to be a- strictly cash business, and the most risky elements of trading in cars eliminated,, he considered the sum. sufficient to act as a standby for emergencies. The garage was to be 'run on the basis of repairs and parking, '''with a special emphasis on the parking," the garage having a unique position for public convenience. The v misfortune of inexperience was offset by the ready offer of his future manager to fill all the gaps and supply all the needs from which he (Chisholm) suffered, and the manager wa3 to work all hours for £6 a week. After making reasonable inquiry as to the manager's ability, he was more than satisfied that he was warranted in making the appointment. The only stipulation that the manager made was that he (Chisholm) should not interfere with the management. During the winter the business was dull.' During Christmas^and summer the outlook was more encouraging. However, that period was comparatively short. Chisholm then outlined certain conversations alleged to have taken place between nimself and the manager. Ultimately the position became untenable, and he called a private meeting^of his principal creditors. About the middle of January and during February he had a return of an old trouble, a nervous breakdown, and it was during that period more than any other,, that the crisis arose. Ho considered there was a working basis oh a, composition of 7s 6d in. the £, and submitted that offer to flic creditors. They seemed disposed to accept the offer. His financial arrangements, bfeing unfortunately held up, the creditors decided to move for an order of bankruptcy. He was pleased to say that ho was now ableto assure his creditors that he could offer them a composition, roughly, on the basis of his previous offer, but owing to a recurrence of sickness during the last fortnight he had been vn-' able to complete tho checking of certain claims which „ wore being made against him, and the exact composition could not, therefore, be calculated. His composition, however, should _appvoximatc the amount of his previous offer. He asked for an adjournment of the meeting for a week. Chisholm said that if he were allow-, ed to resume his .business he thought he could carry out the offer made in his sworn statement. Mr. Hislop said that if the conditions mentioned were accepted he felt sure that approximately £400 would b» forthcoming for tho creditors. Tho offer was also contingent on the landlord allowing Chisholm to continue the business at the same- premises. Tho Official Assignee asked if the creditors were willing to hand back property estimated at £500 for tho offer •of £400. Mr. Chisholm said ho was certain that ho could promise £450 if the conditions were accepted. The Official Assignee remarked that he had a number of documents in regard to which ho would like to consult .Chisholm. There- seemed to have been a lack of proper supervision right through tho business. In reply to a question asked by the Official Assignee, bankrupt said he kept; no books—only memoranda; he was a qualified accountant. In answer to" creditors, Chisholni said that for several months he drew £6 or £ 7 a week from the business. Speaking from memory, he did not think he had drawn any money during tho present year. The Official Assignee said there had been a big leakage somewhere, and ho did not think "Chisholm was wholly ty ' blame for tho position. No records htxk apparently been kept. Several creditors expressed the view tkit steps should be taken to find out \™o was responsible for the position. The meeting was ultimately adjourned till 6th June; and in the meantime it was resolved that further inquiries should bo made, the business to be co*> tiuued for the present.