HOSTEL FAILURE.

New Zealand Herald, Volume LXIII, Issue 19390, 27 July 1926, Page 13

HOSTEL FAILURE.

OMIHA COMPANY'S DEBTS,

EXAMINATION OF DIRECTORS

DILL OF SALE ON FURNITURE

An adjourned meeting of creditors in j the estate of Oniiha Hostel, Limited, whose business was placed in the hands of the Official Assignee, Mr. W. S. Fisher, by order of the Supreme Court, was held | yesterday. The meeting had been adjourned in order that the directors of j the company might be present. The directors were accompanied by their solicitor, Mr. Tong. The liquidator, Mr. J. McD. Coleman, reported that the company was formed on August- 4 last, with a capital of £3OOO in .CI shares. The capital was not ] paid readily and the company ran into debt, there being a loss of £647 ou the trading. Mr. Tong said the purchase of timber to make additions to the hostel had been largely responsible for this loss, and not the trading operations. Mr. G. J. Baker, chairman of directors of the company, was then examined. In reply to Mr. McArthur, who represented a creditor, he said that at a meeting on January 15, the company was being pressed for payment by several creditors and it was thought it might have to go into liquidation. However, it was considered that if it could keep going more capital would be subscribed, and that there would be a fairly substantial profit, on the working. At this meeting he drew a cheque for £125 5s 6d on his own behalf in payment for goods supplied. He had never made a penny out of the hostel, although he had invested over £7OO. v In commenting on the position, Mr. McArthur said it seemed the company had swallowed up all its capital in about four months and had in addition incurred a loss of between £BOO and £9OO. Mr. Baker said that had the Christmas season been as successful as was anticipated there would have been no trouble. Mr. Barker Robinson, a director of the company, was examined in regard to his taking a bill-of-sale for £3OO ori the furniture for the hostel. He said he had adansced the money, but there had been a delay in preparation of the bill-of-sale. He charged the company exactly what he paid for the furniture. Mr. Tong said it was a bona-fide sale. Mr. McArthur said it seemed fair to him to let the bill stand, although there was no doubt that legally the bill should have been registered within 21 days. Mr. Baker expressed the opinion that the hostel could still be sold to advantage next Christmas. Had business been good it would have been easy to sell more shares and pay off debts. It was decided to appoint a committee of five to assist the liquidator with power to act, to investigate the estate and to protect the interests of unsecured creditors.