BANKRUPT TAILOR

New Zealand Herald, Volume LXIX, Issue 21289, 16 September 1932, Page 14

BANKRUPT TAILOR

DEFICIENCY NEARLY £l7, <HK) AFFAIRS OF REUBEN JAFFE MANY TRANSACTIONS INVOLVED STATEMENT TO CREDITORS Tlie affairs of R~ul>cn Jaffe, bankrupt t: i'<fr. wcV? considered at a meeting of creditors yesterday. The official assignee, 1.1r.' A. W. Walters, presided. At the /Outset the official ass : gnee said the'bankruptcy was a very complicated <1:1 e/ and he could not hope to make a ■very thorough investigation at that sitting. He'said Jaffe filed his own petition' on September 7. The statement put in showed that the assets totalled £250, consisting eut : rely of property. The amount owing to unsecured creditors was £1555, 'and to other pied tors £12,268, thetotal delits being £11,103. 'llie deficiency was thus £13,C53. Il yas apparent from cla : ins that were coming in that the deficiency would l>e about £3OOO more. He r suggested that the bankrupt should go .carefully into his liabilities and furnish a new statement. In agreeing to this course, counsel for bankrupt sard that claims of which" Jaffe hud. no'/ previous knowledge were coming in,,one of these being for loss on 'ail iiuc.omple.ted contract Bu*iac:s r.nd Invccinica's In his tta'cni nl sett ng out the causes of 'his ' i-aukiuptcv, the bankrupt taid that dining 1927 he bctame managingdirector of K. Jaffe, Limited; with a capital of £10,500, of which he held £3500, and shortly afterwards managingdirector of Sam Gold, Limited, with a capital of £2500, of which li. Jaffe, Limited, was the real shareholder. The first was a retail business and the second a manufacturing business. Buth businesses were thriving and profitable. In December, 1927, he became the owner •of the leasehold of a section on the Civic Square, being the first to take up one of these leases. He said he was doing well in the tailoring business, and considered he wag justified in taking up the .lease. Hl- considered several proposals,, .and eventually accepted one maue by the Civic Theatre owners. His interest in this investment was valued at £14,C00.

He liad also bought a property in Queen Street, paying £9300 and spending at least £7OO in improvements. lie mortgaged this pivperty to the Norwich Uiiion loiv £7500, later increasing the amount to £BSOO. He found the balance of the cash. It became necessary for the purposes of R. Jaffe, Limited, to find further moneys, and he raised a mortgage of £4yoo oh his Miterest in the Civic Square ,S3C<ion. Of this amount £2500 was used lo settle disputes and actions arising out of ' the negotiations prior to his dealing's with the Civic Theatre owners. The balance of £ISOO Jio w'slied to use for a luiriness trip to England. The Commercial Hank, however, was pressing R. Jaff?, Limited, to reduce the overdraft sv.id he had to apply this balance for ill.at purpose. 5 Hain Cause of Bankruptcy

(Continuing, the bankrupt stated that "the business of R. Jaffe, Limited, was increasing at a great rate, and further credit had to be obta ucd. This he obtained from Johnson Garnet, Limited,, by giving -that firm a second mortgage -over the" tyuecji Street propelty and over the Civ : e Square sect : on. In August,' 1930, the firm of R. Jaffe, Limited, owed him considerable sums. He iieldv a debenture to-tecure moneys due to him, but which he-'had to pledge to the bank for financing purposes. He purchased the debenture from the hank, borrow ng for that puipose. This involved him in further J it-fat ion, and he finally lost the ownership of the debenture. This was the main cause of 3i is bankruptcy. He was not able to pay the interest and principal on the mortgages as they became due. The properties were sold up, and he was left with no assets. Legal costs were very heavy.

He was also guarantor for the rent of-a shop at 219 Queen Street, for which thtt company paid £IOOO in cash as goodwill, and he became liable for £SO a week, plus rales. He had a lease of two shops from Bartlett at a rental of £l4 a week, which he sub-let. The tenants made de-fault,-and he made a considerable loss. The landlord's claim was in the vicinity of. ,£IOOO. A manufacturing firm was claiming from him £4OOO odd for an uncompleted contract, made with R. Jaffe, Limited, of which he was the guarantor. Not Able to Make Offer Bankrupt said he was now employed toy Mrs. E. Jaffe, managing two shops, a n<3 was not in a positon to make an offer. He, added that he thought the claims against him were exorbitant. Since filing his statement of assets and lialjilitietf lie found thrre was £llß to the credit of Sam (told, Linrted, of which about half would belong to his estatu. • There was a general discussion as to the position of bankrupt at the time hj« entered info some of the bigger deals. Bankrupt said he was not aware that he ha-d signed a guarantee for the uncompleted contract, under which £4OCO was now bein<r claimed. A C'red : tor: It i* "( liHle moment, as W'.U be no dividend. The bnnkrunt said he had derived no personal benefit from the vaiious tianiSac"°A credHor said Jaffe had pledged bis own assets <o obtain further credit, and the slump came these had to be

Another creditor said it appeared to }) : m that Jaffe had drained every nrrvc in Irs efforts to do tlie best for all conthe meeting sine die, the official assignee said tlvs was « '>!«* bankruptcy, He would have to. sift all the transactions, as it would be- - lmt)f.svi.le' for h-'m to furn'rh a report on the" '-fore him ft would npor»r tint, .l-ffe's own creditors Wfre jiot ho-t'le to him in any way.