BANKRUPT JEWELLER.

New Zealand Herald, Volume LII, Issue 15830, 29 January 1915, Page 3

BANKRUPT JEWELLER.

CASE OF NOAH COHEN.

PROSECUTION WANTED

ACCOUNTANT'S COMMENTS

The adjourned meeting of creditors in the bankrupt estate of Noah Cohen, jeweller, of Auckland, was held before Mr. W. S. Fisher, official assignee, yesterday. Mr. Denniston appeared for bankrupt. Mr. Fisher said that at the last meeting he had been instructed to investigate the books and Cohen's dealings with Dr. Brockway. He had engaged Mr. 0. C. Gorrie, accountant, who made the following report: —

I hare examined the books, and my investigation has been mainly directed to the reconstruction of Cohen's position in June, 1913, and a comparison of his position at that date with June, 1914. It may be said at once that bankrupt has completely failed to keep such books of account as would enable anyone to ascertain from the books the position in June, 191*3, or at any particular date previous to the meeting of creditors held in July of last year. Cohen is unable to produce any cash book prior to June, 1914, he has kept no creditors' accounts, and no reliance can be placed on the figures in the ledger containing amounts of sundry debtors. He has also failed to keep a stock book, such as is usually kept by jewellers. Mr. Carr, of Messrs. Mandel and Carr, Ltd.. informs me that in June, 1913, a statement was shown to Mr. I. J. Rothschild and himself by bankrupt, representing Cohen's position at the time to be as follows :Liabilities : Creditors, about £800 ; surplus, £1200 ; assets stock, over £1400; book debts. £600.

"Cohen," continues the report, "denies having shown any such statement to either Mr. Can- or Mr. Rothschild, and tells me his stock at that lime was worth anything from £900 to £1200. There is a stock book, however, which shows that stock was token in June, 1913, and I am satisfied that the stock was then considered to be worth £1498. From particulars supplied principally by creditors, I have prepared the following figures, which can only be approximately correct. I elect to eliminate book debts altogether, as the figures relating to them are entirely tintrustworthy, the book debts apparently being next to worthless. Only a detailed investigation could throw any light on their real value.

" I estimate that in June. 1913, his liabilities were :—Creditors, £986 ; surpus, £629 ; assets—stock, £1498 ; at bank, £117. During the following 12 months he sold stock, £1498; and purchased £1723 (less stock at Juno 1914. £700), £2521. His expenses for the period totalled £1275, including drawings at £6 10s a week, £338 ; wages, £378 ; rent, £387 : advertising. £70; general expenses, £100. In June. 1914. the liabilities to creditors were £1560. and the stock £700, leaving a deficiency of £860. An examination of these figures shows the position to be £1489 worse in June, 1914, than in June of the previous year; and as the total expenses amount "to £1273, there would appear, in the absence* of any other explanation, to be a gross loss in trading of £216. Goods which cost Cohen £2521 were apparently sold by him for £2305. Cohen states that in 75 per cent, of the sales made by auction, the goods were sold below cost. On being asked why he continued in business under these conditions, he said he sold below cost to acquire the funds with which to meet bills falling due. The creditors will probably consider the bankrupt's explanation unsatisfactory, even if they assume its accuracy. A thorough "investigation of Cohen's affairs would take time and be expensive. Whether the result would justify the expense, in the shape of increased dividend, is doubtful." Mr. Fisher said he had approached the Crown Solicitor in reference to the relationship between bankrupt and Dr. Brockway, and that official said, he could come to no conclusion without further investigation. The stock in the shop was worth £750. Two bills worth £119, belonged, apparently, to Dr. Brockway. Examination Continued. Cohen was further examined by the assignee. The whole of the furniture, worth £100 to £150, belonged to his wife, he said. Can you produce any document to show the furniture was —My wife may have.

Wasn't this business looked on to be as much your wife's as your own? No.' Further questioning led to a difference of opinion between Mr. Gorrie and Cohen as to whether there was a stock-book or not. The former held that there was none. Mr. Carr: At the meeting of creditors of July, 1914, when you say permission was given you to -sell to Dr. Brockway did you tell them that Dr. Brockway was a partner?— l es. It the creditors state you made no mention of the partnership agreement too. will say they are wrong?— most decidedly. A creditor said the agreement was produced.

Mr. Denniston : Did you produce the partnership agreement at the meeting in Wellington oil July 10?— Yes. The creditors wanted 15s in the £, and I offered 20s.

" Extraordinary Thing." Mr. Carr : Has Mrs. Cohen any personal property?—A few pounds in the bank. Any jewellery?— little; it is worth about £7.

Have you a statement of the cash transactions between yourself and Dr. Brook way ?—Yes.

In your books?—-Yes. Mr. Gorrio : No.

Cohea said he gave a record to Dr. Brockwav on a separate slip of paper. Mr. 'Fisher: What an extraordinary thing. Cohen was subjected to a long examination by Mr. Carr. A Creditor: No reliance can be placed on any statement. Mr. Fisher: That's the conclusion I am coming to. The Creditor-: Can Dr. Brockway and Mrs. Cohen be brought here? Mr. Fisher: I have the power to call them.

Mr. Gorn'e asked for a statement of Cohen's dealings with Dr. Brockway previous to June. 1914. " You told me you had a record," added Mr. Gorric.

Cohen : No complete record. Mr. Gome : No record in fact

Resolutions of Creditors.

A creditor suggested an adjournment while Mr. Goirie. continued his investigations, and that Dr. Brockway and Mrs. Cohen be examined.

Mr. Fisher: There may be nothing in the estate.

At this stage Cohen was asked to retira The assignee, remarked that it was for the creditors to decide what was to be done in the matter. It was a question whether Cohen should be prosecuteu for breaches of the penal clauses of the Bankruptcv Act. and whether they should go to further expense in order "to ascertain the relationship between Cohen and Dr. Brockway.

It was moved by a creditor: That th© assignee be requested to obtain from Dr. Brockway a full statement of payments and receipts between him and the bankrupt, the Fame to be fully investigated."

This was seconded and carried nnanimouslv.

The same creditor then moved "That the assignee be requested to lay the facts of the case before the Crown Solicitor with a view to having bankrupt prosecuted."

This was carried, one creditor, who said he was a friend of Cohen'*, dissenting.