IN BANKRUPTCY

Manawatu Standard, Volume LII, Issue 119, 20 April 1932, Page 9

IN BANKRUPTCY

levin garage proprietors. Nine creditors were present for the examination in bankruptcy at Palmerston North yesterday afternoon by the Deputy-Official Assignee (Mr C. E. Dempsy) of Keith Woodward Drysdale and Allan Nairn* Drysdale, garage proprietors, of Levin. Mr Cooper appeared for bankrupts whose debts to secured creditors amounted to £1473 17s. The estimated value of securities was £1340 4s Bd, leaving a surplus to contra of £133 12s 4d. Debts to unsecured creditors totalled £785 18s 3d, and other liabilities £837 4s Bd. The assets were valued at £428 12s 4d.

The principal unsecured creditors were:—Auto Parts, J. Chambers and Son, Ltd., £32 5s Id; Hope Gibbons. Ltd., £2B 12s 8d; McMnhon Motor Supplies, £ls 15s 9d; Mercantile and General Insurance, £ll/ 9s Id; Michelin and Co., £42 10s 7d; Niven and Co., Ltd., £l6 6s; N.Z. Loan and Mercantile Agency Co., £9B 3s lOd; Shell Oil Co., £ll 9s 8d; Teagle, Smith and Co., £3O 14s lOd; Vacuum Oil Coy., £llO 3s lOd. i Creditors present were Messrs T. F. Relling (representing N.Z. Loan and Mercantile Agency Co.); N. J. Batley (Shell Oil Company); I. H. Nimmo (Vacuum Oil Co.); T. A. Dodson (McMahon Motors, Ltd.), V. Keen (John Chambers and Son); F. W. Hubbard (Holben and Hubbard); R. Luke (J. J. Niven and Co.); J. Drysdale and D. McKay. The sworn written statement made by bankrupts was that they commenced business on December 24, 1930, on which day tiiey purchased land, buildings, plant and stock at the purchase price of £1387 15s 9d, including a mortgage for £893 6s 4d, from the Tate C. M. Sellers, of Levin, When they took over the garage it was doing practically no business, but they hoped to work it up well in about twelve months. The whole of the £494 9s 5d cash actually passed was advanced by their grandfather, Mr J. Drysdale, of Wellington, who was secured by second mortgage over land and buildings and a bill of sale over plant and stock. Their grandfather- arranged and guaranteed a bank overdraft with a limit of £IOO in order that they might have sufficient cash with which to carry on'. Business was quite good during the first six months of operations, but this was not reflected in the bank balances because a considerable proportion qf their earnings was going bn to the (woks and a good deal of cash was spent in alterations and improvements to the internal arrangement of the buildings, and in purchasing additional essential plant. From about July, 1931, business began t.o slacken considerably and that had increased in proportion as the general depression had deepened. For some time, however, they were able to carry on, as their grandfather allowed the bank overdraft limit to be increased first to £l5O and latterly to £250. Subsequently a meeting of creditors was called and they were offered" 2s 6d in the £l, but this was refused. Bankrupts had drawn less than £3 per week each from the business over a period of 15 months, though both were married and had each one child. They attributed their failure to the fact that the business was not able to support two principals; that it had no goodwill; that they had entered business in a period of depression; and that there bud been severe competition, there being nine firms in Levin engaged upon motor repairing and enginoerig. As soon as they were advised that their position was hopeless they called a meeting of creditors, although up to that date, realising that things were not good, they were hoping for an improvement which did not eventuate. Bankrupts, under examination, said they owed the Lo.an and Mercantile Agency Company £9B 3s lOd for goods received on consignment, and were really bound to hold the proceeds of the sale of those goods on trust, but no trust account was kept. Proceeds, less commission, were remitted monthly while bankrupts were able to do so. Moneys received had been used to meet other payments which fell due. Apart from the original mortgagee of the land their grandfather was the only secured creditor. The books disclosed how the turnover had been handled. Not all the money received was paid into the bank. Subsequently the creditors passed a resolution that in view of the unsatisfactory state of affairs revealed by bankrupts’ trading account their discharge be opposed until at least 10s in the £1 was paid.