A BANKRUPT MANUFACTURER

Otago Witness, Issue 4038, 4 August 1931, Page 31

A BANKRUPT MANUFACTURER

PARTNER'S LIABILITY CONSIDERED. The adjourned meeting of creditors in the bankrupt estate of Harold Benson Bills, of Dunedin, a pram manufacturer, vvas held on Friday afternoon before the official assignee (Mr J. Al. Adam). Mr F. Al. Hanan represented the bankrupt and Air F. J. D. Rolfe appeared for the bankrupt’s partner, J. F. M'Lachlan. There were 14 creditors present. lhe bankrupt s statement, as submitted at the original meeting, showed that he owed £894 4s 7d to unsecured creditors and £2Ol 3s to secured creditors, the estimated value of securities being £251). His assets consisted of contingent liability £Bll 6s 7d, cash £3 7s, furniture £2O, and surplus of securities £4B 19s 9d. The total assets were £BB3 13s 4d, leaving a deficiency of £lO Ils 3d. Ihe assignee said that the contingent liability was the liability of the other partner. The bankrupt had previously stated that in September, 1930. he had'been joined in partnership by Al'Lachlan, who had paid in £2OO cash for a third share in the business. He had walked out of the business at the end of Alay of the present year, and he had expected that Al’Lachlan would also file, as he had known when he went into partnership that the debts were £6OO. The assignee had pointed out that it was open to 64 creditors to take action against Al'Lachlan as a partner, but until his position was ascertained nothing definite could be arrived at. The meeting was, therefore, adjourned in order that AFLachlan's position might be ascertained. On resuming yesterday, the assignee stated that he had examined Al'Lachlan, and the effect of his evidence was that he was, in a general way, liable for such debts as were incurred between September 15, 1930, and the end of the partnership in June of this year. These debts amounted to £315 0s lOd.

Mr Rolfe said that this appeared to be a very fair statement of the position, but there might well be debts am >ng those mentioned by the assignee for which M’Lachlan was not liable.

The assignee expressed the opinion that there were none of the debts for which Al'Lachlan was not liable. He did not appear to have taken many precautions when he joined the business—in fact, he seemed to have been very casual about everything. Bills and Al'Lachlan. in fairness to their creditors, should have met them in March, as soon as they saw that the business was slackening. In reply to a question by tlie assignee, the bankrupt said that M'Lachlan, being in charge of the factory, knew the output, and was thus in a position to know the weekly returns. The books were always at his disposal, and he could have examined them whenever he wished. Aloreover, witness told him each month the comparative returns for the corresponding month, of the previous year. Mr A. L. Hayward thought that as the bankrupt was a returned man they should give him his discharge. The assignee said he did not think that this course would be in the bankrupt's best interests. The trouble was that he had not kept in close enough touch with his creditors, and there should have been more confidence between the partners. A short period of probation would do him no harm. Air A. W. Buehler then moved—“ That no application for discharge be granted by the creditors until at least four months from the filing of the petition have elapsed.” Air 11. J. Whitehead seconded the motion, which was carried.