MEETING OF CREDITORS.

Otago Daily Times, Issue 20156, 21 July 1927, Page 2

MEETING OF CREDITORS.

ESTATE OF MOSGIEL DRAPER. A meting of creditors in the bankrupt estate of Edwin Humffray Hely, .drapei, of Mosgiel, was held yesterday afternoon. The Official Assignee (Mr W. D. Wallace) presided. There was. only one secured creditor—the Government, on a loan of £7OO on a property at Waimato valued at £950. The amount unsecured totalled £1771 Bs lOd. The assets of the bankrupt were set down at £2209 15s 3d, plus the value of a second-hand motor car. The details wore: —Stock-in-trade at invoice pritos, £1550; book debts, £4B 14s 2d; cash in hand and in the bank, £3ll Is Id; furniture, £100; equity in property at Vaimate, £250. The largest unsecured creditors fere Macky, Logan, Caldwell (Ltd.), £24£ 8s lid; Makower, M’Beth and Co., £lll 2a 4d; Sargood, Son, and Ewen, £96 12s lOd; Bing, Harris and Co., £56 16s 9d; Abbott, Armstrong, and Howie, £6O 18s 2d: J, A. Paterson and Co., £42 4s; Wellington Woollen Co, £lls 7s fid; Rutherford’s (Ltd.), £63 15s 7d; Ross and Glendining, £33 19s; Berlei (Ltd.), (Auckland), £32 7s 10d: Downs Bros. (Wellington). £2l 7s; L. E. Marks and Saulwick (Wellington), £23 Is lOd; Central Agency Co. (Wellington), £2O 6s 9d; P. B. Sheather Co. (Wellington), £75 9s; John Gruar and Co. (Wellington), £3l 3s Id; W. Liddle and Co (Melbourne), £l2O 4s 9d; Joseph Pickles and Son (Wellington), £79 Is 6d; total £1419 7s Bd. In a statement submitted by the bankrupt he said that in the month of November last, while in the employ of the Canterbury Farmers’ Association, in the capacity of manager of its drapery department at the Waimato branch, he had scon an advertisement in the Otago Daily Times advertising a shop to let at Mosgiel suitable for a drapery business, and offering finance to a suitable tenant. After some negotiations he had leased from Mr John Souter a shop for five years from February 20 last at a rental of £4 per week. The lease contained a covenant that Mr Souter would find £IOSO as capital, of which £250 was to be applied as payment to Mr Souter for the fixtures and fittings and the balance. £BOO, to be the working capital to enable him to purchase the stock. The sum of £IOSO was to bear interest at 6 per cent, and to bo repayable by consecutive monthly instalments of £lO each. The statement continued that the bankrupt commenced business in Mosgiel on February 25 of tais year and that by the terms of the agreement he could not call on Mr Souter for the £BOO before April 10 last. In the meantime he purchased what stock he considered necessary. His first month's purchases amounted to £BOO, and as his prospects were bright and always improving lie .purchased more stock in each of the following months until the total purchases came to £2OOO. This might appear a large sum, submitted bankrupt, but he found it necessary for he success of the business, and as he had still no suspicion that Mr Souter would be unable to find _ the capital promised he considered it justified by the initial results of his venture. On June 8 he received information which led him seriously to doubt Mr Souter’s ability to find the money, and he thereupon consulted Messrs Sievwright, James, and Nichol. They at once communicated with Mr Souter’s solicitors, insisting on him at onc<r*fulfillng his obligations by a certain date. At the same time the solicitors sent a circular to the merchant creditors not represented locally explaining the position and advising that a meeting would be held on June 20 unless in the meantime Mr Souter found the capital promised. Details were supplied by the statement of the non-success of the endeavour to get the money from Mr Souter, and the bankrupt said he attributed his bankruptcy to Mr Souter’s failure to provide the capital promised, although, in justice to Mr Souter, he knew that he had spared no effort to find the amount.

The Official Assignee said that the only secured creditor was the New Zealand Soldiers’ Loan Department, which had a security of £7OO on bankrupt’s property at Waimate. The bankrupt had also stated that he had, in addition to his other assets, a motor car, purchased in 1924 for £260.

The Official Assignee added that the covenant entered into by the lessor had been broken and that it was at the request of the creditors that the bankrupt had filed. An inventory had been taken of the stock, and it was considered to be of the value of £1434 15s. There was the matter of the bankrupt’s furniture, which was valued at £IOO. This value was certainly more than was allowed by the Bankruptcy Act. Mr G. Benson said the reason why the creditors had desired Holy to filo was because they wore dissatisfied, not with the position in connection with the bankrupt at all, but in connection with that of the landlord, Mr Souter. If, as they had now learnt, Mr Souter had honestly endeavoured to find the money, there was not the same blame attachable to him. Had they known the position he did not think they would have wanted Mr Hely to file. They had understood that Mr Souter was to blame and that he had not done his part. It was not the policy of the merchants to force a man into the bankruptcy court. Mr J. B. Nichol (who appeared for the bankrupt) said he had stated in the first circular sent out that Mr Souter had been unable to raise the money, and that it was not suggested that ho was trying to evade his responsibility in this connection. The Official Assignee said they would notice that the bankrupt had purchased the shop fittings, which were valued at £250.

On the motion of Mr G. Benson, seconded by Mr J. R, Glover, it was decided that the bankrupt bo allowed to retain the whole of his house furniture. It was decided to appoint Messrs O. Bonson and J. S. M‘Gregor to act in an honorary position on • behalf of the creditors, with the official assignee in the disposal of the stock for which it was decided to call for tenders. It was also decided to call for tenders for the second-hand car. On the motion of Mr Benson, it was decided that the official assignee submit the lease to the Crown solicitor for his opinion in reference to the bankrupt’s right to a claim for damages, the landlord’s rights to rent, and the official assignee’s rights to the fixtures in the shop. . . . , Mr Benson voiced the opinion of the creditors in sympathising with the bankrupt, and expressing the hope that ho woulcj soon get his discharge.