IN BANKRUPTCY.

Hawera & Normanby Star, Volume XLII, Issue XLII, 14 October 1922, Page 7

IN BANKRUPTCY.

A KAPONGA DRAPER

MEETING AT AUCKLAND

The first meeting of creditors in the bankrupt estate of Arthur Eley Waugh, draper, of Kaponga (Mr. Dick, son), was held in the office of the official assignee at Auckland this week. All the principal creditors were represented. This case was transferred from Taranaki to meet the convenience of creditors, some of the largest of whom are Auckland-firms. The assignee, Mr. TV. S. Fisher, presided. Bankrupt's schedule showed debits amounting to £9587, all owing to unsecured creditors, (and the assets to £5030, leaving a deficiency of £4557 The principal assets were: Stock-in-trade at Kaponga and Manaia. £3590; plant and fittings, £800; book debts. , estimated to produce £500; and cash in hand, £140. Bankrupt, in a written statement,, attributed his failure to the recent slump, and to his opening branches at i Eltham, Inglewftod, and later at Manaia, each of which proved unprofit- , able. j The official assignee said that Mr. G. C. Gorrie, accountant, had prepared ■ trading and profit and loss accounts ' for . the period ended - July, 1922. Bankrupt also prepared trading and profit and loss accounts, but perhaps unintentionally, through ignorance of accounts, his figures were compiled on entirely wrong principles, and were quite misleading. Mr. Gorrie understood that all bankrupt's previous figures had been compiled on the same basis. He believed the balance-sheet of August, 1921. to be approximately correct. The trading account and profit and loss account prepared by Mr. Gorrie showed gross loss in trading of £5291, and a net loss, after including expenses, of £8002. • Bankrupt, on oath, stated that he had purchased the1 Kaponga business in 1919. He could not say what he was worth at the tiffice, without reference to the books. He paid nothing for goodwill, but took over the goods at valuation, for he paid 20s in the £. A letter from the former owner of the business, put "in at this stage, showed that bankrupt fed paid £1177 6s 6d for the vendor's interest, having previously acquired" an interest in "the business. At the time of the com. pletion of the purchase, bankrupt's interest was £2400. Efo gave six bills as part of the purchase money, upon which interest was payable. Continuing under examination, bankrupt said he had not learned book-

keeping. Concerning an allegatiph that he had been selling goods under cost price, bankrupt ..said he was not aware he had done so. He could not sayhe sold £26,000 werth of goods for £21,000. ._Some goods were sold un, der cost price. TKeT assignee: Do you know that wholesale selling of goods under cost price went on ? —No. Did you keep the business, including

the branches, under close personal supervision?— Yes. Is it a fact thai; you were advertising all over the place that you were selling goods under, cost price?-—I can't "What methods were used ?■ —"We onl^ C» did what was generally done during sale time. Bankrupt said he believed himself to be solvent, but received a shock when he took stock. He could not cay if the whole of the business or only the branches were responsible for the trouble. I The assignee: "Would it be" due to your selling goods under cost price; __ can you give us' any idea?—l don't think I can exactly. I Bankrupt was questioned at length ( by a creditor's representative; concernj ing statements issued by him showing his position from time to time. He ! declared they were accurate:, j The creditor's representative;: Then it is fair to assume that on August 19, | 1921, your capital was £3445 8s lOd? - —Yes. | If you started in August, 1921, with (£3445, how do you account, for the ' fact that in July th.^»vear your gross I loss was £8000?— I don't, kno^; only that the slump and branches caused it. Bankrupt admitted holding half-price sales, but he stated that|^i^-vyas well known that goods were sQl'pT^tich were not worth the money p^J£§^them. He sold only unsaleable: ,gf;sdfe??a|:; halfprice. ' "T^Kvvsr ' The creditor: Is it not a faiet that people from all over Taranaki attended these sales? —Yes- they may have I done so. It stands to reason that people would not come from all over Tjaram-aki to buy rotten stuff. Did you sell any kalf-price> goods to tradespeople?—l-don't know if they or their agents bought taajy.-. Bankrupt, continuing under- crossexamination, said he had good" reliable people for assistants and he had nothing to say against them: The creditor: Neither- had your clients apparently. JDo you know that people came in and changed the tickets on the goods and 1 frequently by this means got articles at very much' less than the cost price,, such as an expensive hat for 2s 63? Bankrupt: I" don't know anything about that. ' You were- bankrupt once before ? — Yes, about 16 years ago in- FaTmerston North. . Mr. Dicksoa:: That is ancient history. The creditor: Did you acquaint your Auckland creditors with- this fact when you. took over this business ?—No. I had: got my discharge and" was clear of it. When did you get your- discharge ?— In 1912. . Do you know you got your discharge in 1916;?— X" thought it was back further than that. Mr. Bi&kson: 1 appeared for him then. He^ has- come- back to the fold again. The- creditor: On that occasion did you Jfcave> to submit to a public examination on account of the unsatisfactory nature of" your bankruptcy?— What has-that to'do with it? Mr. Dickso»: Tell them; it does not matter in the- least. I Bankrupt: Yes, f did. i J n r^E^ to the assignee, bankrupt said' he did not know what dividend his Polmerston estate paid to creditors. Examined by Mr. Dickson, bankrupt said' tfea>fr goods fell in value last year, and he had to seTt suits costing £10 for £T 10s. and Tints costing £2 10s for 255. Farmers had had a strenuous time" on aemnnt of financial stringency-, and ttiincs were bad. Tt wns resoWJ that tlie assignee invpstisate matters in connection with t.*>a bankruptcy, rind that the facts be olaced before tho Crown Solicitor. A committee was anpninted to act in conjunction with the assignee in realising on the estate.