A COROMANDEL BANK RUPTCY.

New Zealand Herald, Volume XLIII, Issue 13235, 21 July 1906, Page 7

A COROMANDEL BANK RUPTCY.

i :..-.,.;■• .. '.'..."'' ' .''.''*':' ■■-.;''•■• ■:';w ."''-■:': ":'.'■.. •.'■'-" ' j AFFAIRS OF A YIOT&UCEerfiR. !'\"-";. : ' ~—~~ r ■ ... ... ■•. ■. ' ; ;-oy : 'v:'a|| J TRANSACTION'S BETWEEN FATHK* ,, | • '" ■;■'...'"' AND SON. '■'■■^ : viysfi^M Sow*: interesting particular* connected with /_'. a Coromande; botelkc-per'* bankruptcy wer« ." : .- : \ related yesterday afterwjon m. a m««4i»f (A i creditor* in estate of -.John-'-- 'Lynch,,-; Jatb*'." ;,:' :-pM i licensee of the tJokonda Hotel, ftt-Coromtn- ':. ."'■"■-$. i del, who recently placed hi; stairs in -(fa*' ' ' hands «}, the : «fii<ciai usn {;»««•. <■ -Th« ***tfa** (Mr. M. Gerard! pre-uifsi, and .thtvcreditor*- . v " present were M.«*».- It. U, Mmim (Gw? : ■• SS and Meozi**}, £19 ?* &d: .!»o. Raid (.T. Reid ' .' ,< and Cod. £26 ** 3d:' E, t„«najfwih (E. L*» r " ■.' i guth and C&,). im 11, id. Mr. H. W. Hud* I *oa was alio pt'cMrnt on fx-Ita,lf of Messrs. L. ' '. D. Xatban and Co., who hold *' HI! of '*»&».'. '' : '';' ; i:fi for £100 over the famkiite. Mr. C E. MacCormick appeared for the landlord (Mr. Jf. ' Lynch!. ■,»,;■ The. Assignee,, haviiijf read the debtor** : ;.- | statement of his affair*, ax already published, " said that when the. bankruptcy occurred he j found two bailiffs in i j»p^i»it—onocu ■ ': |of die hill-of-»AiC rushlers .and on« on. bohalt- .' jof the landlord. He put hi» agent in pos- '.■'■.;; i session, «nd after «ora« <!elay "h« (jot po»j ws.oo« of the fumituM', which wa* v«l««d j at £211. With the a,-v:it of the biH*o£-iNi|*. : v'-'iSfeJi' | holders he sold the t'nndturv fat £150 «* | the landlord (debtor'* father), who »ho purj chased the *tock-in-ti.;t,v.. tor £15. Although ."' ' ;■' i inoit of the money tor the i.<.«* iheii'<o had ■- j betii advanced by tar landlord, .he would '■'"'V'.yS : httvu to pay the. estate about £,ia on acootuit ' -•-■ of the Unexpired period. He sueti also .'■'■> j included two cottages on ground. hold under j iuinei>'- lights, which the bankrupt valued . V j at £,100, but whirl* lie (the assignee) did " j not. think would rv*»h.«i! more than about ■ j *40. The claim of the hill-of-salo hoWerr (about £120,1 would be mot iirst, and ti» landlord's preferential elaiui for rent (which the act of bankruptcy had reduced from 12 to six* months) would bo met n*xt. " Th* ?*,m* so far realised would amount to about £lwy and afier payment of expense* there " would be ' practically nothing left for the, ordinary creditors, except perhaps & little over £40, which would be «ufuctout to pay only a very small dividend, ft w«» decided that it would bo of no u*e to attempt to oispoH' of. the business a* a going concern, ' ' and to save a possible large claim, on ih* estate, he had surrendered the balance of the lease. What appeared to be an extraordinary position was that whilst the debtOE' now owed about £500, he had practical) held his own whilst ha had been carrying oil the business. His «ii*tak,(> had b*#n m , taking over about £240 of his father's old debts. The question was whether tho debtor was justified in doing this when starting ' with no capital and with such a (small turnover as he had. '■■-•. ■.'..••■ Mr. Laiigguth: What equivalent did a« v receive for it? L . . • ....... ~.•:■ The Assignee: Nothing, except the privilege- of running the hotel. Every penny oF the £240 was paid with the creditor*' mottejf or out of his profits. I am not sure that he has not made himself liable under, the penal clauses of the Act. '■■■'. ■■■..;, . . •■'■■, Mr. MacConnick said that the debtorcOttld hardly bo blamed for a depression in trade. ' The Assignee (to debtor): Were you aware of tho amount of you* liability when you''' took over the debts? • ' • ', The Debtor: Yes," but trade was then far different. It went 'right down about throe ' mouths-: after-I look over .hotel. »■. ."• The Assignee; Your book> do not bear out) '■ that statmrxmt. '.■'"...

that statement, Mr. J. Lynch, sen., on being question h* the assignee, denied that the debts referred to wore due wlien hi* son took'over th* if " hotel. He paid everything regularly* »nd' - the only accounts owing were thaw tot the .. - current month's supplies. ;- ; The Assignee: If the payment of' these accounts by your son on youi behalf- in oS proved will you refund the amount to the estate? -~■ :■>;" ■:,■':+ - Mr. MacConnick said ha would adviw his client not to answer this uuestion at tb* present stage. • The Assignee- said it appeared fromith*' debtor's statement tha,fc he had undertaken - to pay these accounts. ■■- *■/.•■'*• Mr. Keid: The creditor a-were not «w*r« '-SI of this understanding. ':'.'. Mr. MacConnick: Did not the creditor* know that they were supplying Lynch," junior 1,.. ~..„.■,•-.„._,.,....■■=..*-,:.w . ««^,«i»i» The Assignee:' Did they know that he had no capital but debts? , ■ l Mr. Hudson said that his firm had nef*r recognised anyone but Mr. Lynch, mo-, is regard to tho hitter's account. The Debtor said he had no batik account '" of his own, and he often paid accounts -with his father's cheque, giving him the cash. . The Assignee said it mimfid that the bank* rupt had come perilously near the operation, of the penal clauses of tin* Act. Jrlo could have had.no prospect of 'paying these accounts when taking them over. The'' or** sent position was that Mr. Lynch, mil, had i in the first place received £200 for the furniture and had now got it back for £{50,', as well as the hotel, and (hat ho had also' had £240 of debts paid by his Son. ■, -'• •■ "* •»'.> Mt.-MacCormick". He has loaf, the u.%# of hit* house for 15. iron tint. - The Assignee: Oh, no; he will receive six ' months* , rent • under his preferential •' claim. Six months • was paid before ths ■ »"".'■< bankruptcy, add therefore Ids only low it ,'- that of three months'; rent, and the £20 advanced towards the license fee. - ■. . \ ■ Mr. MacConnick': 1 do not think anything' could be said against the debtor except that he lias made a bad bargain. The Assignee: He did not keep propel books. ,- ■ • i * Mr. MacCormick: Ho has a record of what be has taken and what he has spt'nt. .Some tsiseussion took place concerning iim ' '\i debts paid, and the assignee pointed out that whereas several of th» present creditors had had small amounts paid which were owing by Mr. Lynch, sen., they were now creditors for much larger amounts.'-Some reference • was made to a payment of £51 to Strachstx and Co. (Dunedin) on May 30 lust (on account of a debt of £120), hut th« debtor's wife said that of this amount £50 was & gift from a friend. - . * ..-.'.•-' ; ' Mr. MacCormick said that when Mr. Lyneh/ sen., put his bailiff in it was not for the ■ purpose of pressing hi* son, but with fch**' '. "t object of protecting himself against the bill- , • of-sale holders. " " , ( Mr. Hudson, speaking on -..behalf of tb*» ' *':, bill-of-salo holders, said that knowing thai 12 months' rent was duo they had to take action to- protect themselves. Otherwise th * landlord might- have , seized the furniture. When-the position was pointed out to tho bankrupt tho Iftttpr acted very etrafghtfoc ' wardly. . ■ j. . . ;, \ : The Assignee suggested that Mr. Lynch, ; . sen., should repay to tho estate tiho amount of the debts paid on his behalf by Kho debtor, less the value of the stock when the latter took possession. Mr, MacG'orrnick: Because they are father' and son? ...:■■ > - - --* "•-,-- »..•.,. ■ :.:

and son: • ■ ■>* • ■■■ - ■■* -. • ---•■.• The Assignee: No. ,I£ they had not been.? father and sod they would not have had such a transaction, '~;;: A motion was carried confirming: the action ,', ftß of the assignee in disposing of the fumifoM'*'' and stock-in-trade, and in surrendering th«:•'••" balance of the lease. Th© meeting was then adjourned till * , August 3. :■''■'' ;,. : - /,::-;>.. .;