TOOK OVER DEBTS HE COULD NOT PAY

Manawatu Times, Volume 62, Issue 284, 30 November 1937, Page 3

TOOK OVER DEBTS HE COULD NOT PAY

Venture in Milk Bar Leads to Bankruptcy

Taking over debts which he found it impossible to pay, and failing to make the turnover he anticipated, Donald McDonald, ol Palmerston North, acknowledged unsecured debts of £225 when he faced his creditors yesterday before the Deputy Official Assignee, Mr. F. C. Litchfield. After examination of bankrupt, the meeting was adjourned, no motion being passed. Bankrupt, in a written statement, said ho purchased the “Blue Bird” milk bar on August 27, the previous owner, Mrs. P. Power, who had boarded with his wife since-July, failing to make a success of it owing to illness. He offered to run the business on her behalf for a short period to see if it could be [bolstered up, and with a view to purchase. He took over on August 3 and •after about a fortnight agreed to pay | Mrs. Power £25 in cash and take over I her liabilities. There was a cash credit on August 3 of £l6 16s. Managed Taxi Firm.

”1 thought that by the addition of a tobacco kiosk tho business could be extended and show a profit,” added Donald. “I had no cash of my own but was earning £5 2s a week as manager of the Blue Band Taxis. As I was taking over the business as a going concern. I thought my wages would provide sufficient for working expenses. I also had an arrangement for using the stand in conjunction with the Blue Band taxis. In order to pay Mrs. Power and effect alterations to a window I had to borrow £35 from the Ridgway Loan Company on the security of the fittings and also my own personal furniture and effects. Mrs. Power’s liabilities appeared to be about £lO4, and of this sum the accounts of Joseph Nathan and Co. (£69 5s 3d) and Goldingham and Beckett (£l9 2s 3d) accounted for £BB 7s 6d. I saw both these firms and explained the proposed sale and arranged to pay their accounts by instalments. The other creditors I had hoped to pay in cash. Before the sale was completed and the security executed, Mr. Loughnan, who was acting on behalf of Mrs. Power, informed mo that ho had been told that Goldingham and Beckett and Nathan and Co. had made no objection to my proposal to give security over the plant. When the tobacco kiosk was installed I found I had to employ an extra hand to run it, and also that my job with Blue Band taxis allowed me little time to give to the personal management of the business. The returns from the new window were not up to expectations and the profits hardly sufficient to cover the additional wages. I have done everything possible to effect a sale of the business, as I could see that was the only possible way for me to settle with the creditors. I attribute my bankruptcy to the fact that I had had no previous experience of managinng this class of business, my judgment was at fault in buying what I now realise was a hopelessly involved business. The increase in turnover did not eventuate and high rent and wages aggravated the position. Once I had purchased the business, I do not think I could have pursued any other policy which would have proved more successful.” Details of Debts. Unsecured debts amounted to £225 15s 6d, while the Ridgway Loan and Finance Co., Ltd. was the only secured creditor, for an amount of £3O. Wages and rent owing totalled £l6 16s Bd, giving a total indebtedness of £242 12s 2d. Assets of £54 19s 4d, including

stock £34 19s 4d, reduced the liability to £lB7 12s 10d. The unsecured creditors were as follow:—Burns, Philp and Co., £B9 18s; L. C. Driver, £1 13s 4d; C. W. Batten and Co. (Wellington), £1 2s sd; Standard Cordial Co., £0 8s 7d; J. Lennon (Palmerston North), 7s 6d; National Cash Register Co., Ltd., £6 0s 6d; P. and T. Department, 11s 4d; Goldingham and Beckett, £l6 2s 3d; Agency Co. of New Zealand, Ltd., £3 15s 7d; Alexander Clark, Ltd., £7 16s; Cadbury, Fry, Hudson, Co., £5 3s; New Zealand Agency and Importing Co. (Auckland), £1; Mackintosh, Caley, Ltd. (Dunedin), £2 19s 8d; Nestle and Angio-Swiss Co., £6 9s lid; Toop and Neilson (Wellington), 4s sd; Joseph Nathan and Co., L'td. (Palmerston North), £69 5s 3d. Those present were Mr. A. B. Loughnan (representing McDonald), Mr. T. M. N. Rodgers (representing the secured creditor), Mr. D. Wouldes, Mr E. F. de Tourret, Mr. H. Piercey (Nathan and Co.), Mr. L. C. Driver, Mr. B. L. Barker (Burns, Philp aud Co.). To Mr. Litchfield, bankrupt said he was not interested in any other partnera. e-vj js *6 &or. :: *

ship, and had no assets beyond those' shown. He had thought of taking up interior decorating, but did not proceed with this. Bankrupt was further questioned by creditors present. He affirmed that when he took over the business there was a prospect of it making good. The meeting was adjourned, bra?i d\l bus eJeimsfiO &