MEETING OF CREDITORS.

Otago Daily Times, Issue 21254, 7 February 1931, Page 23

MEETING OF CREDITORS.

HOTELKEEPER’S INSOLVENCY. A meeting of creditors in the estate of George Harper Pufflctt, hotelkeeper, of Dnntroon, was held yesterday before the official assignee (Mr .T. M. Adam). Bankrupt was represented by Mr W. G. Hay. Unsecured creditors amounted to £720 Is 2d, and there were no secured creditors. Assets totalled £269 Os 2d, leaving a deficiency of £359 ss. The principal creditors were:—P. Cross' and Sons, Ltd. (Christchurch) £6(5, B. Powley and Co. £35, Haling and Co. (Christchurch) £4l 10s, J. Malm audio (Kurow) £2l 7s, Lanes, Ltd., £l7 18s, Wholesalers, Ltd., £52 19s, Ballin Bros., Ltd. (Christchurch) £l3 4s, Milne, Bremner, Ltd., £l6O 13s, Dunedin Brewery, Ltd., £76 17s, Milne, Bremner and Dunedin Brewery £ll4 18s (rent), £63 (advanced). Book debts amounted to £ll2. Bankrupt, in his written statement, said that he went into the Duntroon Hotel on May 20, 1929. His previous experience in hotclkceping was obtained in the Tokornaru Bay Hotel, which he managed for a company for some years as licensee. The Duntroon Hotel was owned by a partnership consisting of Milne, Bremner, Ltd., and the Dunedin Brewery, Ltd. He purchased the stock and furniture from the previous licensee (one Cowdray) and paid for it at valuation and took a lease of the hotel for three years at a rental of £l4 10s per week. There was no premium on the lease. The amount which was required on settlement to enable him to go into the hotel was about £BSO. Of that ho had £SOO in cash, and he borrowed £lB7 on the security of a life insurance policy. The balance was advanced to him by Milne, Bremner, Ltd., and the Dunedin Brewery, Ltd. The takings of the hotel were represented to him to be about £IOO per week, and that figure proved to be correct. If the margin of profit in the business had been what he anticipated the business would have been successful. It appeared from the bank book, however, that the amount of money which was taken was not sufficient to carry on the business; in other words, that the profit made was not what would be anticipated from the amount of the takings. He considered that the following reasons contributed to that;—(l) There was a considerable amount of bulk trade in beer done at that hotel, and the profit on that was much less than on sales over the bar. Moreover, a big proportion of trade was done in bottled whisky, on which the profit was very small. (2) Relying on a greater margin of profit, which had been his previous experience, he expended considerable sums on the improvement of the house furnishings. He estimated that he spent about £2OO in that way. He did not reap the benefit of that when he came to sell out, the valuation being about the same on his sale as it was on his purchase. (3) There were sale yards attached to the hotel, and he spent about £IOO in improving them, mostly in labour. On account of the slump in farming, the revenue derived from the use of those yards was much less than had been anticipated, both in the way of rent for the use of the yards and indirectly from the use by farmers of the hotel and bar. On one occasion meals were prepared for 80 on a sale day, and actually only 25 had meals in the hotel. He cited that as an example. (4) He spent too much money in keeping up the accommodation side of the business whereas he should have concentrated on the bar trade and let the other side go. All his takings were banked and all payments were made by cheque and the disposition of his takings could therefore be checked through the bank hooks.

la February, 1930, he purchased a motor car, passing in the old one. The cost, in addition to the price allowed for the old car, was £l9O, but at that time he did not anticipate that his present situation would arise. He paid to his wife £2 10s for her services in the hotel, per week, but out of that sum she kept herself and her daughter in clothing. In the Tokornaru Hotel she had been drawing £l5O per year from the proprietors for her services. In October, 1930, he sold out of the hotel. At that time pressure was being brought to bear on him by the Dunedin Brewery and Milne, Bremner, Ltd., both for rent and for their goods accounts. Messrs Solomon, Gascoigne, Solomon and Co. wore then acting as his. solicitors. In view of threatened proceedings by the above-mentioned firms who proposed, inter alia, to put the bailiffs into the hotel, liis solicitors advised him to give an order on them to pay to the Dunedin Brewery and Milne, Bremner, Ltd. out of the moneys coming to him sufficient moneys to satisfy their claims. That he did. There was not sufficient money to satisfy the claims, and accordingly all the moneys which were received out of the sale, namely £719 odd, were paid to them.

Ho consulted Mr Hay in regard to his financial position after the sale of the hotel, and on his advice he cancelled at once, on November 18, 1930, the order which he had previously given to Messrs Solomon, Gascoigne, Solomon, and Co. The moneys, however, were paid according to the order. A meeting of creditors was held at Mr Hay’s office on November 24, 1930, and at that meeting it was resolved unanimously that he should assign his estate to Mr <T. W. Smeaton for the benefit of the creditors. Subsequent to the meeting Messrs Cross and Sons, Ltd., R. Powley and Co., Maling and Co., and Wholesalers consulted Mr W. F. Forrester, and on December 17 Mr Forrester wrote to Mr Hay stating that those creditors insisted on bankruptcy. In consequence of that he had filed his petition. He had now no money nor had his wife. He was doing nothing, and they were living with his wife’s people. Replying to questions, bankrupt said that he had given the order in October. He had expected to realise more than he did from the sale of the property. The money had been paid under pressure. Of the £314 which he owed for rent, £2OO was paid. It was explained that bankrupt’s rent had been set down at £2O per week, reducible to £l4 10s per week provided ho traded only with Milne, Bremner and the Dunedin Brewery. It had now been discovered that he had traded with other dealers as well. Mr Milne, of Milne, Bremner, said that, provided his firm and the Dunedin Brewery were allowed to keep the money they had received they would abandon their claim to the extra £5 10s per week for rent.

Bankrupt said the travellers must have known that lie was trading with other firms. He had drawn no wages during the time lie was in the hotel. Trade had been getting worse. His predecessor had often taken as much as £.120 on a sale day while bankrupt’s host total was £3B. The realisation of the assets was left in the hands of the official assignee.