AN UNPROFITABLE VENTURE.

Otago Daily Times, Issue 20433, 13 June 1928, Page 6

AN UNPROFITABLE VENTURE.

HOTELKEEPER’S BANKRUPTCY. (Special to Daily Times.) WELLINGTON, June 12. A meeting of creditors in the estate of William Kenmir Dunce, private hotelkeeper, Wellington, was held at the office of the official assignee (Mr b. Tansley) to-day. The statement of accounts showed unsecured creditors £oSO 14s 4d; secured creditors £3071 13s 7d, less estimated value of securities £2000; deficiency £lO7l 13s 7d. In' his sworn statement the bankrupt said that prior to January, 1927, he had for many years carried on business at Timaru as an electrical engineer. In January, 1927, he heard that the Hotel Grand Central was for sale, and was a bargain at £7500. He came to Wellington and interviewed the proprietresses, who represented that they were making £ISOO a year out of the place. He ultimately purchased at £7520, paying £I7OO cash, the balance being secured by a mortgage securing payment of principal and interest at the rate of £2O per week. After he had been in possession for a few months the conclusion was forced upon him that unless he could reduce the overhead expenses it would be impossible to make the' place pay; He put in about £7OO worth of improvements, and rebuilt the kitchen, and in this way succeeded in running the place on half the staff. In January, 1927, on the renewal of his lease, the rent was increased from £l9 per week to £35 per week. Thus, in rent and interest alone, he had to face £55 per week. In order to keep going he raised money on his house in Timaru. At the end of November, 1927, an accountant ,got out a balance sheet showing a loss of £6OO for the year. Subsequently, after expending all his money and being in arrears with interest, the mortgagees exercised their power of sale, eventually selling the hotel for £4OOO. The mortgagees of his dwelling house in Timaru intended exercising their power of sale. All his money had gone into the hotel. He attributed his position to the fact that he had purchased the hotel at a price far in excess of its true value. He was out of work, and had a family. The Official Assignee asked the creditors if they had any resolution to move. There was no response, and the meeting was adjourned sine die.