BANKRUPTCY.

New Zealand Herald, Volume XXVI, Issue 9263, 17 January 1889, Page 3

BANKRUPTCY.

DEBTOR'S EXAMINATION.

A. E. Isaacs.—Alfred E. Isaacs, of the firm of E. and A. Isaacs, bankrupts, made the following statement before the Official Assignee yesterday :—I am a member of the firm of E. and A. Isaacs, and joined the firm in the year 1376. The business had for many years previously been carried on by my father, Edward Isaacs, and my uncle, Henry Isaacs, under the style of E. and H. Isaacs. Mr. Henry Isaacs lefb the firm some short time before I joined it, and some time after I became a partner the style of the firm was altered to E. and A. Isaacs. From that time until tho time of bankruptcy, the business had been carried on by my father and myself, but of late years my father had suffered from continued ill-health, and for the past two years ho has been unable to attend to business matters at all. At the time I joined the firm, the .whole of the assets belonged to my father. From a balance-sheet prepared in December, 1877, it appears that the business of the firm was then in a sound condition. Business continued good for some years, but between 1877 and 1884 the firm entered into certain land speculations. These materially increased the liabilities of the firm, particularly the bank overdraft, which has for some years fluctuated between £10,000 and £15,000, and this necessitated a large annual outgo for interest. A statement of the affairs of the firm prepared in February, 1884, shows that the then liabilities of the firm were £19,436, of which £11,000 was duo to the bank, while the assets of the firm (including the personal accounts of myfather, myself, and of Mr. R. E. Isaacs, who had received advances from the firm) appear at £27,323. This amount, however, included landed property of the firm, and shares which we held in the Stud Company, Tramway Company, Fisher and Company. In tho year 1885 we sold the Ellerslie property for £15,000, receiving part cash and a mortgage for £12,000 from the syndicate, all of whom have since become bankrupt. This £12,000 was treated as an account due to the firm. On the 15th March, 1880, another statement of the firm's affairs was prepared, and our liabilities on that date appeared at £26,000. Our estimated assets included the mortgage at Ellerslie, which was taken at the full apparent value of £12,000, and other landed property and shares, valued then at £2250. Wβ considered ourselves then perfectly solvent. Since then trade has fallen oIF, the value of property has greatly depreciated, and the £12,000 mortgage lias been thrown on our hands. Practically the properties which in March, 1886, appeared to be readily saleable at £15,000 or £16,000 have depreciated in valuo so greatly aa to become, in fact, at present unsaleable. In the years 1886 and 1887 tho bank, which had theretofore been unsecured, pressed for security, and in 1887 the landed properties of the firm were mortgaged to them. About the same time also Mr. E. Isaucs gave to Mr. H. Isaacs, who is a, large creditor, a mortgage over his personal interest in the business and other landed properties jointly owned by Mr. H. Isaacs and himself. From the time the bank received security until the bankruptcy, they urged us to reduce the amount due to them, and in September, 1888, issued a writ claiming £13,000. Believing that we could, with time, surmount our difficulties if wo could arrange matters with our home creditors, we obtained six months' time from the bank by granting them additional security, and we communicated at once with our two principal home creditors. They were dissatisfied with our action in granting tho bank security, and desired us to wind up our affairs. A careful examination and investigation of our affairs was made, with the result that, at present values, our estate showed a deficiency of about £6000. We endeavoured to effect an arrangement, and succeeded in obtaining a satisfactory guarantee of 10s in the £1. A deed of composition was prepared ; but at the last moment, and when everything had been arranged, our largest home creditor I refused to sign, and insisted upon bankf ruptcy. As he had issued a writ against us for over £7000, we had no other course open than to comply with his request, and filed our petition. Since the bankruptcy ho has offered to accept the 10s previously agreed on, but up to the present time the guarantor has refused to renew his guarantee which was refused before the bankruptcy. Stock has been taken since the bankruptcy, and shows value at cost price £4593. We have handed over to the Official Assignee bills receivable, all of which we believe to be .srood, amounting to £1177 7s 2d and £155 10s 5d in cash. Our book debts amount to £3149, ' estimated to produce £2500; our other properties, unaffected by mortgage, may realise £250 ; adding to these the surplus from securities in the hands of secured creditors, estimated at £810 6s 10d, makes the total assets £9466 4s sd, against a total unsecured liability of £16.125 3s. The addition.alsecurity abovealluded to, and on which we gained six months' time from the Bank, consisted of bulk goods. The arrangement was made on September 17th, ISBS, by which we agreed to give up to the Bnnlc a'.s additional security bond warrants tepre- j senting goods to the estimated value of J

£3000. I then assigned my life policies, , and Mrs. Isaacs gave to the Bank, as further security, her promissory note for £1500. I attribute the bankruptcy to the depression in trade; the falling value in property, and the failure to receive interest on our Elterslie mortgage, necessitating a large annual debit against our bank account for interest on the overdraft. I am still in communication with the gentleman who was previously willing to guarantee 10s fa the £, and may perhaps yeb be able to arrange a composition. Since September laafc tEe books have been kept by a nominee of the Bank, and bhesystem on which theyhave been kept may have been somewhat changed; but up to that time no variation has been made since the business was commenced. The principle on which they were kept was single entry, and since the Bank's nominee has had them in hand the system hae been partially changed to double entry. With regard to my separate estate, having no private debts, I have included whatever separate assets I have in the joint estate. To the best of my belief I have disclosed everything in the nature of assets possessed by the joint and my own separate estate. My father is seriously ill, and quite fife to be subjectec' to a private examination. I am not in a position to state the nature and extent of his private estate, bub as regards the joint estate, the sole conduct of the business has been in my hands for over two years, and even if he were well in health, he would not be in a position to give information bearing on the joinb estate.