IN BANKRUPTCY.

Hauraki Plains Gazette, Volume XXXXII, Issue 2732, 5 June 1931, Page 2

IN BANKRUPTCY.

PAEROA GARAGE PROPRIETOR. MEETING OF CREDITORS. . A meeting of th creditors, of J. T. Reilley, of Paeroa, garage proprietor, who has filed a bankruptcy petition, was held on Tuesday in the Magistrate’s Court. Mr A. W. Watters, Official Assignee, conducted the meeting. A statement prepared by Reilley showed that he came to New Zealand on February 22nd, 1930, from Honolulu, where conditions had not agreed with his wife’s health. He possessed at the time he landed in New Zealand, 500 dollars of his own, while his wife ha’d a personal saving of' £650. Financed to this extent, he had decided to establish a garage in Cambridge, but was refused a building license by the Borough Council; Going further afield, therefore, he had located what he considered to be a likely place for a garage in Paeroa, and had agreed to purchase a shop, under Cassrel’s Estate, at a cost of £2,500. He paid down on the building £250, borrowed from . his wife, as a first security on a first mortgage of £l,OOO. The transaction also included a second mortgage of £1,250. He spent a certain amount of money, about £l7O in repairs and improvements. Constant service at petrol pumps, which he had installed outside his garage, brought him a large proportion of the petrol and oil trade of the town. He reckoned on cash trading in this line.

However, as time went on, his sales fell, overhead rates, interest and taxes ate up his capital, and he was very hard hit by the present financial slump. He was confident of pulling through, however, but. his creditors pressed and threatened. He negotiated with prospective buyers, was unsuccessful, and decided to file. His assets were: Stock in trade, £BB 7s 9d; book debts, £250; cash in 'hand, £1 4s 6d;. fittings and plant, £lO5 12s 6d; buildings, £2,500, plus £l7O repairs and improvements. His unsecured debts were £1,520; his secured debts £2,256; and there was £1,520 owing, with interests; leaving a deficiency of £642. The deficiency was made up of: Bad debts, £25 10s 6d; legal expenses, £7O; wages, £244 14s 6d; interest, £200; rates, £56 : 14s 4d; stationery, £45. His gross profit was shown, up till March 31st, at £73 12s Bd, and his net profit, £45. His drawings were £272, or £227 in excess of net profits. It was pointed out to the bankrupt that his wife, who had advanced him a considerable sum, would not figure as an ordinary creditor under the “Married Women’s Property Act.” If a wife advances money for her husband’s business she cannot claim as a creditor until all other creditors have been paid in full. Questioned as to when he had first realised that he had become insolvent bankrupt replied: “I never was under the impression that I was insolvent.” However, Ac admitted that he had realised that he was “slipping back” when he experienced difficulty in meeting his accounts at the beginning of the year. He had had a rough analysis of his position made, which proved in figures )to show a surplus. He realised, however, that his affairs were financially unsound, and had gone to the Texas Oil Company, his largest creditor, for advice. The company had agreed to take no action against him, but to stand by him if need be. However, the Loan and Mercantile pressed for payment of an account, and in fairness to all his creditors Reilley had decided to file. At the conclusion of the examination the meeting decided to have a’ further and thorough investigation into the books of the bankrupt, and that a report be furnished to a further meeting-of creditors to be held in Auckland. A committee, consisting of representatives of the Vacuum and Texas Oil Companies, was instituted to confer with the official assignee. , It was decided that Reilley would be entitled to the tools of his trade, and that Mrs Reilley’s car would not be included in the estate.