A TANGLED SKEIN.

New Zealand Herald, Volume XLV, Issue 13927, 8 December 1908, Page 7

A TANGLED SKEIN.

PUKEKOHE FIRM'S AFFAIRS.

MEETING OF CREDITORS.

A MKKTiNG of creditors in the estate of H. and B. Andrew, Ltd.; contractors, Pukckohe, was held at the official assignee's office yesterday. About a dozen creditors were represented.

Mr. E. Gerard (official assignee) explained that he was acting, by order of the Court, as provisional official liquidator in this estate. The position of affairs was rather a curious and complicated one, and would require some untangling. Prior to tho otate coming to his hands there was a complication owin to a disposal of some assets to the company's former chairman of directors (Mr. H. Andrew). He (Mr. Gerard) thought these assets were really the company's assets, and had„ seized them. Certain machinery had been seized under a bill-of-salc by Mr. Comrie, who had advanced £1000 and other sums, making a total of £1400. He (Mr. Gerard) hail called the meeting, in order to make inquiries, and get at tho true position of affairs. Mr. J. Comrio was tho managing director at the time the order of the Court was made, and Mr. Comrie would be questioned first.

In answer to Mr. Gerard, Mr. Comrio said the advance of £1000 was made in February last, when ho was managing director of the firm. No stock was taken to ascertain the position when he paid in the £1000. The. machinery was then valued at £2000, and the share capital was stated at £4500. There had been no writing down of the value of the plant, and that stood as at. June, 1907.

Mr. Gerard: Then, at that time, when you put in the £1000, the shares were not worth 10s in the £?—No; they could not have been.

In further replies, Mr. Comrio said that at. the end of June he took over about £190 worth of stock on a contra account. He remembered when it was thought wise to dispose of the Te Awamutu branch of the business, ho was then a director of the company. A meeting of directors was held, and Mr. H. Andrew, then managing director, made an offer to purchase the plant and goodwill of the lease in Te Awamutu for £900, and offered to pav down £100 in cash and his £800 in shares. The offer was accepted, and Mr. H. Andrew then resigned the position of chairman of directors, and he (Mr. Comrio) was elected to the chair. Mr. Gerard: There was a time when the company sent a document to you purporting to be & transfer of the shares of H. Andrew to the number of 600, from H. Andrew to yourself. What connection had you with^that?—None at all that I am aware of. It was not sent at my instigation. Mr. Comrie also said the share transfer had been signed by Mr. H. Andrew a month or two after the To Awamutu transaction. It was brought to him (Comrie) for signature, but he refused. to sign it. He had never agreed to accept transfer of the shares, but did not write, as managing director, to ask Mr. H. Andrew what he was going- to do. The matter was merely allowed to rest.

Did you know there had been an exchange of the company's assets for the company's shares plus £100!— Yes.

Did you, as managing director, think this was all —Yes, And when you were asked to sign the transfer it dawned upon you that it was not a legal transaction? Did you draw any salary from the company? Yes; 10s a day when I worked. Mr. Gerard said the value of the assets would be most difficult to ascertain. As the plant stood, ready to be used, it was worth, in his opinion, more than Mr. Conine*B security, but yet he (Mr. Gerard) could not advise the creditors to buy Mr. Comrie out. Mr. Comrie had allowed the projected sale to stand over. The case was a most complicated one. as the directors of the company had dealings with themselves. Mr. C. J. Parr (who appeared for the Pukekoho East Road Board): It is a tangle that wants a lot of unravelling. A Creditor: The directors hold the assets, and we have the debts. (Laughter.) Mr. Gerard Yes, you have the book debts. I don't say there is anything improper anywhere, but it is a difficult case to understand. In reply to Mr. Staunton, who represented a city creditor, Mr. Comrie said he could not remember who made the first suggestion about the To Awamutu business, nor how the offer came to be made by Mr. H. Andrew. He could not say whether anything was ever said about finding a purchaser for the shares, and ho thought the 800 shares were then worth about 15s to 17s in the £. Mr. Gerard: That's simply marvellous. A year ago you thought the shares worth 15s. I myself knew, 18 months ago, they were not worth 15s. .. s Mr. Parr: You were chairman f the Pukekohe East Road Board while managing director of H. and B. Andrew, Ltd.? Mr. Comrie: Yes. Did .your Road Board let a contract to the Andrew Company during your term as chairman for breaking and spreading road metal?— Yes. Who certified to the work done for the progress payments?—l don't think anyone did. Someone had to make out the voucher and pa3s it for payment?— The chairman had to certify it. Then you certified the vouchers for payment to your own company?— Yes. There was no engineer to certify to the amount of work done?— No. _ Did you certify that the contractors were entitled to so much and make out the cheque?— all came before the Board. Who estimated whether the work was done?— Ballard and myself. And 75 per cent., totalling some £200, was paid in progress payment*? Mr. Comrie also stated that there were still wages owing on the contracts. At this stage Mr. John Ferguson, of Pukekohe, offered to take over the contracts in their present stage and pay the wages due. Mr. Parr, on behalf of the Board, agreed to accept this, and the creditors, by resolution, affirmed the arrangement. Mr. Ben. Andrew was then called. He was formerly secretary to the company, and gave details of the meetings of directors. He said he had been under the impression that Mr. Comrie had agreed to the transfer of the 800 shares to him. Mr. Comrie had always been a man whoso word could be relied upon, and Mr. Comrie's denial of a knowledge of the proposed transfer raised a doubt in his (Mr. Andrew's) mind. Had Mr. Comrie not denied knowledge of the proposal ho (Andrew) would have stated without hestitation that Mr. Comrie had agreed to the transfer. _ Mr. Gerard: It seems quite clear that there was only a transfer as between your brother and the company. The Comrie aspect was only introduced to get over the legal difficulty. It was never intended that Comrio should become the purchaser of the shares?—l understood he was only to hold them temporarily. " Would anyone have given 15s each for the shares a year ago?—No, I don't think-so. Mr. Bruce (auditor): The company was registered as with a capital of £4500, but there was not that amount in cash. There was something like £730 short. Mr. Andrew further said the liabilities of the company exceeded the total of the book debts. ~ A Creditor: What other assets arc there besides the security held by Mr. Comrie? Mr. Gerard: There's only the book debts. Mr. Bruce said the book debts totalled £1300 at last balance-sheet. He thought £1000 could be collected. So far £200 had been collected, but in respect to £500 the accounts were disputed, the debtors writing to say they had paid their accounts, some of them stating they held receipts. After further discussion the meeting was adjourned to give Mr. Comrie time to consider a proposal that he should take over the plant in settlement of his bill of sale and prove against the estate in respect to another claim, Mr. Gerard remarking that Mr. Comrie had a pretty safe security, holding practically all the security, although lie was not to be blamed for that. There was another director who also held a security. Perhaps, after an adjournment, the affairs might bo untangled more fully, for it was certainly a most complicated case.