MEETING OF CREDITORS

Otago Daily Times, Issue 22260, 12 May 1934, Page 2

MEETING OF CREDITORS

ESTATE OF HENRY STOKES OFFER BY MORTGAGEES. The adjourned meeting of creditors in the bankrupt estate of Henry Stokes, sheep farmer, Lindis, was held yesterday in the office of the official assignee (Mr J. M. Adam). The bankrupt was represented by Mr 11. S. Adams. The first meeting bad been adjourned to enable the assignee to look into the position of various properties held by the bankrupt. Mr E. A. Duncan appeared for John Humphries and others, of Napier, mortgagees of Napier property, and Mr C. J. Payne for Wright, Stephenson, and Co., the secured creditors over the Liudis run. The official assignee said Ins investigations showed that there was nothing in the Napier properties to bo recovered The statement made bv the bankrupt at the last meeting was identical with that made before the Mortgagees’ Relief Commission in Hawke’s Bay when applying for relief. With regard to the Tarraa property, the position was that apparently the partnership itself was insolvent, and under the partnership agreement if one of the partners went bankrupt the other two proceeded to get rid of him. If that were done the estate would be put into the bands of the other two, but, apart from the partnership, the sons apparently owed their, father £ISOO. If the sons weiit bankrupt that would disappear. Mr Payne said he would like to make a suggestion. There were two properties —the building called the Ritz, in Dunedin,, and the property at Tarras. No doubt the mortgages on the Tarras property were greater than the value of the securities; and that being so the partnership was nnfinancial and really bankrupt. On behalf of the mortgagee’s he would say this: The mortgagees that the Stokes’s had got into this difficulty on account of the earthquake—that was the foundation cause of their difficulty—and they were willing that the sons should be given a chance. If the sons could get hold of the property the mortgagees would agree to allow all the mortgage moneys to remain and trust the (Stokes sons to pull things through. This would give the sons a chance of making good. The mortgagees considered that- the sons had worked hard and deserved a chance, and for that reaspp they would allow their moneys to remain. If the sons would take over the Tarras property and indemnify the father against the partnership debts the assignee could relieve the partnership from any moneys owing by the partnership to Henry Stokes. The partnership relieving Henry Stokes from all moneys owing by him with respect to any deficit in connection with the securities. That would mean there would be no further difficulty with respect to the Tarras property, because they would be carried on by the sons. The largest creditors were anxious that the Ritz should be carried on because there was a chance of it being aq asset. If the suggestion be made were carried out it would mean that the Ritz could be carried on by the Henry Stokes estate and become a valuable asset. Mr Duncan said be had no instructions from his principals to agree to any proposal, and all he could do was to report to them. They were told by Mr Payne that there was no equity in the Tarras property, but he did not know that the matter could be thrown out so quickly. He desired to know if there had been any dropping back or increase of stock. Mr Payne said there was no doubt the stock had been depleted. Mr Adams said he would like to know what the bank thought of the suggestion made on behalf of the mortgagees.

Mr C. W. S. Cox (Bank of New South Wales) said that the matter had been placed before the bank, and in connection with the runs it authorised him to consent to release the sons on the lines suggested by Sir Payne on the understanding that if they made good they would make some gratuitous payment to the estate. After a conversational discussion, Mr Duncan said that he would suggest to his principals that unless they were prepared to put up the money to obtain an independent valuation of the run they would have to fall in with the suggestion made by Mr Payne. It was decided to leaved it in the official assignee’s hands to wind up the estate.