Sharebrokers Big Deficiency

Manawatu Times, Volume 63, Issue 87, 13 April 1938, Page 5

Sharebrokers Big Deficiency

Heavy Claims by Creditors

INTRICATE FINANCE IN CHRISTCHURCH BANKRUPTCY Par Press Association. CHRISTCHURCH, April 12. A deficiency of £16,442 10s 2d in the firm of Thomas Newburgh and Son was shown in a financial statement read to a meeting of creditors held this morning. In addition to the affairs of the firm, the meeting also dealt with the estate of the late Mr. Thomas Newburgh, former Mayor of Sumner and a well-known city sharebroker, and with the estate of his son, Mr. Eric Prvce Newburgh, partner in the firm. The Official Assignee, Mr. G. W. Brown, presided over an attendance of about 50. There were numerous solicitors present and also several city accountants. In the case of Eric Newburgh, the bankrupt’s statement was to the effect that he was able to pay his debts. His reason for filing was the fact that he was liable as a partner for partnership debts of the firm.

Mr. Brown informed the meeting that following a Court order placing the Thomas Newburgh estate in his hands he suggested to Eric Newburgh to file on the grounds that such action would make the hai>dling of the position less difficult. Eric Newburgh had agreed to that course.

The financial statement covering the affairs of the firm of Thomas Newburgh and Son was set out as follows.— Assets: Book debts, sundry clients, £25,251; sharebrokers, £20319; total, £45570; cash in band, £233; furniture, fittings, and car, £1045; real property, equity in Invercargill property, £11,665; Sumner and Aikman r s road, £4603 7s t)d; less secured, £300; investments, £10,875. Debts and liabilities; Sundry creditors and clients, £33,326; sharebrokers, £30,855; total £64,181. Bank of New Zealand, £10,501; stock, £12,754; general total. £87,436. The deficiency was shown as £16,442. The amount shown by Eric Pryce Newburgh as owing to unsecured creditors was £34 12s Bd, secured creditors £134 5s 9d, less estimated value of securities at £3OO, making the total debts £34 12s Sd. The total assets of £227 13s 111 were made up of £55 stock, £6 19s B<l cash in Post Office, and in hand £165 14s 3d.

Mr. Brown said that as far as the estate of Thomas Newburgh was concerned, for the time being he had not a very complete set of information, but a certain amount of information regarding assets was available. This showed that insurances due totalled £13,145. It appeared that the widow would be entitled to certain insurance money, so that all the money would not pass to him as administrator in the estate of Thomas Newburgh. In addition to insurances he had information concerning a stamp collection. That collection was reported to be of considerable value. He had the stamps in his possession but would have to have the collection listed and valued. Regarding the liabilities he was not aware as yet what would be the total amount. He had notice from the National Bank, together with proofs of debt, in which the bank claimed £2367 Is lOd due from Thomas New-* burgh, who had apparently been guarantor. Book Value Only. Mr. Brown emphasised that the list of assets was taken from books and represented book value and not what the assets would produce on realisation. He thought it would be found that some of the debts owing would be irrecoverable. Scrip in various concerns seemed to bear a fictitious value. Mr. Brown thought that some Of the items would be either worthless or that they would realise very little. Liabilities included sundry creditors, £13,818 Bs, under the heading of the Thomas Newburgh No. 3 account. Particulars he had about that were rather vague, said Mr. Brown. Ha understood that it linked up with « transaction Thomas Newburgh entered into called Metal Mining and Investment Corporation. The unsecured creditors’ total woud be augmented to tha extent of several thousands of pounds. For example, he had had notice of ouo claim for £4500 aud the amount owing to the creditor was shown in the statement as £287 15s. The amount in another instance w r as £73 18s 2d compared with the creditor’s proof of debt for £6875. A third creditor was listed for £76 14s lid, and his claim was for £1829, while another, who was listed ot £5, had, Mr. Brown understood, tho right to claim for between £7OOO and £BOOO. These amounts would give somo

indication of the serious discrepancies in the amounts of the records and the claims that would actually be lodged. Mr. Brown remarked it was due in pare to the fact that clients’ accounts had been debited with the price of shares,

notwithstanding the fact that in some cases they had not received scrip. In

connection with the Bank of New Zealand’s holdings it appeared evident that the scrip and stock belonging to clients, which he had reason to believe had been lodged with the firm for safe custody, had been lodged with the bank in support of overdraft.

Mr. Brown enumerated the profit and loss of business since 1931 as follows: 1931, profit £1909; 1932, profit £1015; 1933, profit £1903; 1934, profit £721; 1935, loss £B9; 1936, loss £1283; 1937, loss £2444.

Questioning of Eric Newburgh was left over until later in the meeting, and this morning’s business concluded with the appointment of Messrs. R. L. Bush, A. S. Nicholls, G. Bashford, W. H. Nicholls, aud J. D. Renton as a committee to assist the Official Assignee in the administration of the estates.