BUILDER'S FAILURE.

New Zealand Herald, Volume LXIII, Issue 19508, 11 December 1926, Page 14

BUILDER'S FAILURE.

SPECULATIVE VENTURES, LARGE AMOUNT INVOLVED. DISAPPROVAL OF METHODS. Although a nominal surplus of £8383 was shown in the schedule of Allan L, Petherick, builder, a meeting of creditors yesterday was far from optimistic regarding an immediate dividend of 20s in the £. Over 30 creditors were represented and Mr. Jordan appeared for bankrupt. The schedule revealed unsecured liabilities amounting to £4819 lis Bd, and secured debts of £17,359. The securities consisting of 26 houses, sections and shops, were valued a"t £30,552.

Bankrupt attributed his failure to a slump in property values. He said he had been in the building trade all his life and. commenced speculative building about three years ago with £3OO capital and a loan of £350. In December, 1925, values fell and he suffered an illness. He anticipated there would be an improvement in property values after the winter, but his dealings were cut short. The official assignee, Mr. G. N. Morris, said a preliminary meeting of .creditors had obtained valuations of 14 of tho properties. Two had been sold up by the mortgagees and there was a risk of others disappearing unless funds were available to meet charges. Under examination, bankrupt said he had been able to meet his debts until last December. Rough balance-sheets had been drawn up every quarter and the books were kept with fair' regularity. A clerk received £3O a month to attend to this work and a typist was also employed. Since last December 12 houses had been erected. Ten of these were speculations. Bankrupt said he was convinced of his solvency a year ago. A Creditor: You had summonses against you for two years before that.—Bankrupt: Yes, but I paid my way. But it was obvious you could not pay your way as you went on.—A lot of men cannot do that. I had the goods and only needed sales.

Mr. Morris: I heard 12 months ago that bankrupt was likely to como here. It seems that some creditors have been financing him when they knew it was a bit of a gamble. Certainly some of them wero not in his confidence. His books are not adequate, but they are better than thoso kept by most builders who como here.

A creditor said no useful purpose could be accomplished by attempting to find a basis for prosecution.

It was resolved to record disapproval of bankx-upt's methods and the official assignee was requested to oppose the granting of a discharge within 12 months.