DEED OF ARRANGEMENT.

Otago Daily Times, Issue 19965, 6 December 1926, Page 12

DEED OF ARRANGEMENT.

APPLICATION TO TOIL. BANK MANAGER’S FRAUD. (Pee United Peess Association.) STRATFORD, December 6. The arrest of a bank manager at Stratford last year on charges of embezzling, and his bankruptcy subsequent to his imprisonment, were responsible for involved litigation before .the Chief Justice (Mr Justice Skerrett) in the Supreme Court. The Deputy Official Assignee asked that a deed of arrangement between William Kerr, now undergoing sentence, and the Union Bank of Australia and others, should be set aside as void under tho Bankruptcy Act. . After a lengthy argument decision was reserved. Briefly, the position was that, early in July, 1925, it was discovered that Kerr, then the manager of the bank at Stratford, had been embezzling the bank’s funds and using them to acquire valuable timber rights on the West Coast of the South Island. J. H. Robson and T. A. Sullivan had an option over these and R. R Binnie was induced by Kerr to lend him £IOOO to enable the purchase to be made. Some of the bank’s money was used for the same purpose. On the discovery of irregularities a deed of arrangement was executed on July 9 at the instance of the bank, between the bank, Robinson, Sullivan, Binnie, and Kerr. Under the deed it was provided that the timber rights should be transferred to the bank, which, was empowered to sell them on any terms it thought fit, and to apply the proceeds as follows 1. In payment of costs incurred by the bank over the trouble. . 2. In the payment of moneys stolen—including other moneys than those used for the purchase of the timber rights—together with interest. 3. Payment to Binnie of £IOOO, with interest at 10 per cent. 4. In payment of £IOOO to Robson. 5. In payment of out-of-pocket expenses to Sullivan. 6. Any surplus to be divided between Robinson and Binnie. Shortly afterwards Kerr was arrested on various charges of theft, and sent to prison. On August 12, 1925, he was adjudicated a bankrupt, and as a result the Deputy Official Assignee now attacked the deed and asked that it be set aside as being one in defraud of Kerr’s creditors.