Bankrupt Firewood Merchant

Manawatu Times, Volume LV, Issue 6839, 21 April 1932, Page 9

Bankrupt Firewood Merchant

MEETING OF CREDITORS LAPSES. A meeting of creditors called for yesterday in tho bankrupt estate of Jens Christopher Jensen, of Palmerston North, firewood merchant, lapsed for want of a quorum, the only creditor not attending. Bankrupt’s statement of assets and liabilities showed total debts, all owing to an unsecured creditor, amounting to £329 I2s, against which the only assets were book debts totalling £55 7s 2d, but estimated to produce £s.'The deficiency was thus £32-1 12s. In his personal statement bankrupt set out that in January, 1930, having disposed of a wood and coal business ho had in Palmerston North, he decided to purchase some wood cutting rights in the Ohakunc district from a man named (lowland. He hrtd no capital, the purchaso of the rights being financed by the Bank of New Zealand on tho security of a mortgage on his wife’s house property in Featiiemone street, Palmerston North. He paid (lowland £3OO for the wood cutting rights and his equipment. At the time ho acquired tho business the current price l'or firewood was 30s per cord, and at this price there was an approximate profit of 5s 6d per cord. In order to increase the output he spent over £3OO in moving a tram line, which left him short of working capital. Prior to his purchasing from Gowland, Air. G. Luoni had requested that he tako in with him as a partner his brother, H. Luoni. The latter made investigation of the affairs of the business, and bankrupt made available all the records and books in connection with the

business. Luoni was apparently satisfied with them and entered into the business as a partner in July, 1930, paying £3OO for a third share. This £3OO was paid into the partnership account. .Shortly after the partnership was formed, the price of firewood started to drop. Bankrupt had canvassed among Gowland’s customers after acquiring the business and they had agreed to support him and to take the same quantities of wood as they had taken from Gowland. The customers were not bound by the contracts, and bankrupt was relying on their promises of support. When the price started to drop, many of the orders were cancelled, and such orders as were obtained had to be supplied at current prices. The fall in price was due to tho present depression, and when tho partnership realised that the business could not bo operated at a profit, it was decided to dis-

continue. Operations were ceased in November, 1930, and ho understood that all the creditors of the partnership were paid. He came out of this venture with nothing, although he had put over £750 into it. Judgment was then obtained against him by Luoni for £3OO, the latter alleging misrepresentation. Luoni subsequently took what assets there were of the partnership in part satisfaction of the judgment, and in October, 1931, a judgment summons was issued against him for the payment of £lO a month. He was unable to make any payment under the order, and when steps were taken to enforce it, he was compelled to file a petition in bankruptcy. Luoni was his only creditor and bankrupt was unable to make him any offer. Since November, 1930, he had been unemployed, with the exception of an occasional odd job.