CHEMIST'S BANKRUPTCY.

New Zealand Herald, Volume LXVII, Issue 20538, 12 April 1930, Page 15

CHEMIST'S BANKRUPTCY.

jyOUNG MAN IN NEW SHOP.

recital of misfortune.

CREDITORS NOT SATISFIED.

MORE INVESTIGATION WANTED

A meeting of tho creditors of Augustus Samuel Hodgson, a young chemist, of Mount Albert, was held yesterday. At (he same time a meeting of creditors of his mother, Mrs. E. R. C. Hodgson, who had financed her son in tho business, was summoned, but this lapsed owing to tho fact that thero was not n quorum of proved creditors. Tho official assignee, Jlr. A. W. Watters, presided over a largo attendance.

In his schedule bankrupt showed assets amounting to £4Ol 13s and debts to unsecured creditors, which ho stated were incomplete, amounting to £361 15s 3d.

Jn a written statement bankrupt said he started in business in July, 1927, in a new shop at Mount Albert. Ho had been a chemist's assistant for four years. As he was only 20 years of ago the shop was leased in tho name of his mother. He had approximately £3OO capital, which was lent to him by his mother. The fittings cost about £l5O and tho stock was purchased at £4OO, a promissory note being given by his mother for this. At the beginning business was good and tho takings wero £2B to £3O a week. Over-purchase and Depression. At tho end of six months his mother ,was called upon to meet her promissory note and sho was unable to do so. Action was taken and she raised a third mortgage over her houso and a collateral bill of sale was given over tho stock. Prospects were then bright. Bankrupt overpurchased and depression followed. Creditors began to press and summonses were issued. His mother raised further finance and in addition to those commitments he ,wais paying £3 a week rent and £5 10s a week to a chemist whom ho employed. Unfortunately, not long after, this his business suffered a severe setback, from .which it was only recently recovering. He was supplied by a wholesale firm with poison in error for .a harmless drug and used the poison as an ingredient in the preparati&i of 21 prescriptions, with the result that one child was poisoned and became dangerously ill and many others were also affected. Naturally, business 'dropped. A writ for damages was issued against tho firm, but tho action was settled out of Court for £SOO, out of which he received in December £2OO, while £-10 was paid to his solicitor in repayment of a loan, and £36 was ased for the purchase of Christmas stock., the balance going in costs and disbursements. While the action was pending, the business got further behind and moro money was borrowed to keep it going. Tho present debts wero all contracted prior to the poisoning incident. Takings and Profit. When summonses wero issued, continued the statement, bankrupt let judgment go by default, not realising that costs were running up. Until he filed bo bad been endeavouring to compromise with his creditors, but had been unable to do so. His drawings out of the shop takings did not exceed £2 a week and he considered the poisoning incident bad ruined everything. . • , i In tho course of examination bankrupt said his takings for two weeks in March averaged £ll 0s 3d a week; over a period of three weeks in February, £7 15s 8d a week; and for the four weeks in January, £7 17s lid a week. His profit the first year was £l5O, inclusive of tho £2 B week which he drew. The second year's profit was not as much as his drawings. The business was showing a profit fcefore the poisoning cases if he did not charge anything for his own labour. Bankrupt was closely questioned by creditors as to his mother s position in the business, it being contended by some that the mother was really the owner. Mr. Watters considered it was plain jthat the son owned the business. His mother had raised the money to finance it Bnd was in the position of a guarantor. Questions were asked regarding the disposal of the £SOO bankrupt received as damages. A creditor contended that that piatter should be investigated. It was pbsurd that £2OO should bo absorbed in (costs for an action settled out of Court. Bankrupt said lie received a cheque for '£2ol, which was nsed to pay off money that had been borrowed and for overhead charges. He had not received more than £27o'out of the £SOO. Fees and disbursements had taken £230. A creditor then moved that as bankrupt lad continued to trade and to incur debts [when he knew ho had not a reasonable prospect of meeting his obligations his affairs be placed in tho hands of the Crown Prosecutor. This motion was carried. It was also "decided to accept an offer which wa3 made that day for tho business.