MR. D. H. McKENZIE'S ESTATE.

New Zealand Herald, Volume XXVI, Issue 9306, 8 March 1889, Page 6

MR. D. H. McKENZIE'S ESTATE.

MEETING OF CREDITORS.

EXTRAORDINARY STATEMENTS. A meeting of the : creditors of Mr. D. H. McKenzie was held yesterday afternoon at his office, Fort-street, to consider the position of the estate. About 40 persons were present. Mr. M. G. McGregor attended on behalf of Mr. Kenneth McGregor, at whose instance the meeting had been convened. Mr. S. Hesketh represented the trustees of the estate (Messrs. John Buchanan, William Johnston, and R. O. Young), and Mr. A. E. Devore was present on behalf of Mr. MoKenzie.

Some delay occurred at the outset owing to the fact that none of those who were asked to take the chair would consent to do so. : Mr. McGregor proceeded to address the meeting, no chairman having been appointed. He said that he was acting under instructions from Mr. Kenneth McGregor, of Whangarei Heads. His client was intimately acquainted with the position of the debtor's affairs, and was aware that he had had assets representing a large sum of money wholly unencumbered, out of which he had ho doubt a substantial dividend would result to the creditors. In this he was supported by the expressions of opinion from different creditors who were present at the meetings held in connection with the estate, the most sanguine believing that the estate would realise 15s in the £, whilst the least hopeful imagined that about 10s would be yielded. At this stage Mr. E. Wood took the chair. Mr. McGregor, continuing, said that the first intimation of this matter was conveyed in a circular dated the 14th of February, in which the trustees lamented that their information was incomplete or incorrect, and that a dividend of 23 in the £ would be paid. He (Mr. McGregor) waited upon the solicitor to the trustees, and was supplied with information which was very general. He pressed for further information, so that he could judge of what the trustees were doing, and he received a statement which appeared so extraordinary that he at. once wrote to the trustees, asking them to convene "a meeting of the creditors. This request was declined in a letter, signed by Messrs. Hesketh and Richmond, in which it was stated that the trustees regretted that they did not feel justified in acceding to the request of one creditor to call a meeting of creditors in the estate, but were quite prepared to give effect to any reasonable request by a substantial number of the creditors. It was also pointed out that it was believed that a comparatively short period would see the wholo estate wound up, and the letter further stated that Mr. K. McGregor had not yet executed the deed of assignment under which the trustees act. Upon receipt of this letter, several creditors were consulted, and it was thought expedient to call this meeting. Mr. Hesketh remarked that this was only an informal meeting— meeting not attended by the body of creditors, some of whom resided out of Auckland ; and the meeting being informal, any course taken, any discussion at the meetiug, must be abortive. If they wanted to discuss the trustees' action they should have a full meeting, where everything could be fully discussed, and any course upon which they might decido could be given effect to. He thought the better plan would be to let the whole matter stand over until a day to be fixed by the trustees, when they could hand over tho estate to the creditors. He might say in passing that the trustees desire the fullest possiblo enquiry in every shape and form; books, papers, documents, anything wanted by the 1 creditors would be gladly . furnished, and I had been furnished, to creditors who had signed tho deed. He suggested that the meeting be adjourned until the 21st of May next, on which day they proposed to have the estate wound up, and a complete statement submitted to the creditors. The conclusion come to by a meeting which was not a general meeting could have very little effect.

Mr. Devore asked the cause for the delay in holding the adjourned meeting. Air. Hesketh replied that the trustees thought that they would bo able to close up the whole matter by May. They would be able to realise shares and everything else by the 21st of May. There were a lot of shares in hand that were practically unsaleable.

Mr. McGregor said they would see, when the figures were submitted to them, that the estate was pretty nearly wound-up by the trustees. He was perfectly certain that they would not have a more representative meeting than was assembled that day. He might say at once that the trustees were acting wholly without authority ; they had no right to intermeddle with this estate, as they wore acting under a deed which was not signed by several creditors, and which was, therefore, wholly worthless. It was to draw the attention of the general body of creditors to this matter that they had summoned that meeting, and any steps they took would be perfectly legitimate. Mr. Ilesketh said that Mr. McGregor was under a misapprehension in stating that the trustees were acting without authority, as there were comparatively few creditors only of the general number who had not signed the deed. The Chairman thought the suggestion raised by Mr. Hesketh that they should delay dealing with this matter, was quite uncallod for. He thought the meeting was a representative one. Judging from the content of the documents placed in his hands during the past few days, it was high time that the creditors raised their voice against the action of the trustees. Speaking fearlessly and honestly, he would say that he never heard of a case that deserved more, should he say censure, on the part of creditors. (Hear, hear.) The deed had never been shown to him, although he found there were £10 paid for getting signatures to this deed. If they had the accounts before them, they would be astounded at the charges made against the estate. If they were satisfied with what had been done, he would suggest that the trustees should got the whole lot. (Laughter.) He found that the trustees had taken £860 for commission, and that the charges had been in every sense excessive. - Mr. A. Heather said he was somewhat in sympathy with Mr. Hesketh, but he suggested that tho adjourned meeting be held in April, and a statement of the affairs of the estate bo put into the hands of every creditor. It was not courteous for the creditors to discuss this question whilst the trustees were absent. He represented tho Auckland Agricultural Company, and except for seeing a paragraph in that day's Herald he should not have been there that day. It was pointed out that the 21st of April, a month earlier than the date suggested by Mr. Hesketh, would be Sunday. Mr. Hesketh said he had no objection to the adjourned meeting being held about the 21st of April, and a motion to that effect was proposed by Mr. Hesketh and seconded by Mr. Heather. Mr. McGregor moved an amendment, "That the business of the meeting proceed." A full and complete statement had been prepared by the trustees; and the balance of the estate consisted of land at Whangaroi and in Miranda bush, shares in the Miranda Coal Company and in tho Kaihu Valley Company, and there was a steam launch and other email items, which could not be realised for some time.

Mr. Mennio seconded the amendment, which was carried.

Mr. Hesketh submitted that the voting on tho motion and amendment must be estimated according to tho value of the claims against the estate of those who voted. They could nob discuss the matter in the absence of the trustees, who would have committed a breach of duty in attending a meeting which was not a meeting of the general body of creditors. It would be absolutely unfair to investigate the accounts now, and it would be far more satisfactory to have a full meeting to discuss the whole matter fully. The Chairman ruled that the business of the meeting must proceed. Mr. McGregor produced a statement of accounts prepared and submitted by the trustees. He said that in those accounts extraordinary revelations were made. They gathered from them that the nominal unencumbered assets referred to by the trustees, which thoy said they wore fully justified in valuing at £8817 IDs, had dwindled down ■when realised to £4887 18a lOd. Those were tho unencumbered assets, and they were charged with certain payments amounting to under £1000. Thoy would expect that with those assets thorO would bo a substantial dividend. To their sur-

prise they found that the total assets amounted to £265. The liquidation expenses were set out. as follows : —Legal, £124 13s; clerical, £170 17s 6d; general, £223 2s sd; auctioneers' commission, £274 17s; advertising, £135 10a ; making a total of £928 198 lid. The trustees' commission was set down at £860 3s 6d, so that to realise for the creditors' benefit £265 6a 6d, they had expended over £1790. They had taken over all the unencumbered property -of the estate, on which there were charges to the amount of £16,000 or £17,000, and they had paid to the mortgagee, the property realising £128,000. They had to pay the preferential creditors the differences between these sums. There were other payments that were astonishing ; they had paid on shares in the Miranda Coal Co. £250 for arrears of calls. These shares were absolutely unsaleable. There were Kaihu Valley Railway and Leader newspaper sh < res. Shortly, the statement of the preferential payments was a most interesting perusal. It was very intertaining to see how the trustees had paid themselves. The estate was assigned on August 27, 1887, and exactly one month later each trustee drew £50, and on the 31st of October, another month later, another £50, and shortly afterwards £75 each. Mr. McGregor went on to comment strongly on the action of the trustees. Mr. Devore thought the creditors would like to hear the trustees before giving an expression of opinion. (Hear, hear.) He thought the only way in which Mr. McKenzie could be protected between the crediditors and the trustees in the coming revelation, was to file. Then, if the creditors wished to investigate, inquiry could be held in the course of bankruptcy proceedings. The Chairman thought that if the meeting was postponed for fourteen days the trustees would have ample time to meet the creditors.

Mr. Hesketh said he had no hesitancy in saying that the trustees would meet the creditors in that time.

Eventually it was decided, " That the trustees be requested to convene a meetiug on the 21st of March, and that a statement of the assets, &c., be placed in the hands of each creditor two days previously."