BUSINESS FAILURE

New Zealand Herald, Volume LXXII, Issue 22172, 27 July 1935, Page 16

BUSINESS FAILURE

WOMAN'S VENTURE OVER £2OOO DEFICIENCY FURTHER INQUIRY NEEDED A deficiency of £2056 was shown in the schedule of Muriel Ann Mitchell, bankrupt hosiery importer, of Queen Street, which was presented at a meeting of creditors held before the official assignee. Mr. F. M. Watters, yesterday. Assets were shown at £2OO. while debts were stated to amount to £2256. Bankrupt said in a statement that she began business on her own account in Queen Street in 1932. She had no capital, but arranged to sell consignment stock from large firms. However, after a few months, the firms decided to withdraw their credit, unless the business was formed into a private company, with the firms holding a debenture over the assets. While she refused to agree to the proposal, bankrupt continued, the claim was eventually settled, although at the time she had other liabilities. While waiting for stocks from a company in London, with which she had arranged for an agency, she had to carry on with the assistance of a small bank overdraft, while selling on consignment from another firm. Stocks arrived in November, 1933, but in the meanwhile liabilities had increased, a good deal of the profits from the business being absorbed in paying off the debts. To increase turnover, baakrupt opened branch shops in Victoria Street and Karangahape Road, but, although the turnover justified extensions, the lack of capital could nt>t be offset, profits being absorl>ed by interest charges and valuation fees. At the beginning of this year she had considered turning the business into a company, but at the end of May she realised this could not te accomplished, and that the business could not be carried on, owing to various reasons, including the lack of finance and the Joss of an agency.

The opinion that bankrupt's aflairs required a good deal of further investigation was expressed by the assignee, who said assets' in one case had apparently been shown twice in the schedule, increasing the deficit by another £IOO.

After three creditors had been appointed to assist the assignee to, investigate the position, the inquiry was adjourned.