CONFECTIONER’S FAILURE

Poverty Bay Herald, Volume LX, Issue 18036, 13 March 1933, Page 9

CONFECTIONER’S FAILURE

DEFICIENCY OF £564 EXPLANATION TO CREDITORS There VV!ts °nly a very small attendance at a meeting this afternoon ot creditors in the bankrupt estate of William Benson, ol’ Gisborne, confectioner and taxi-proprietor, whose statement showed an estimated deficiency of £504 ills 2d. The meeting was presided* over by the Official Assignee, Mr. .J. X. Naldcr, and the creditors- present or represented were Mr. W. F. Callaghan, the PublicTrustee (Mr. Westmoreland), Wholesale Supplies Agency (Mr. T. G. Froude.), and Mr. O. J. M. Alley, the bankrupt was not represented by counscl.

Tim following statement made by tho bankrupt was read by the assignee:-- . "Four years ago I purchased a business called tho Gisborne Orange Mill from Mr. ,1. W. Scholium for £290, paying £lO deposit, and the balance at the rate of £1 a week. 1 had at the time a taxi business which was paying fairly well. As my health was very bad at this, time it was my intention to sell my taxi and [int the money into the mill, the car being worth about £2OO. I was unable to find a buyer, so 1 carried on. I was doing fairly well in the shop, and working lip a good business. .1 then bad lo alter my shop, at a cost of about £4O. putting in plant to the extent of £6O to cope with the increased trade. “My activities began to affect the tearooms next door, and they started an action to recover damages from the. Public Trust Office. I then received notice from the Public Trustee to take off confectionery and all hot stuff, which involved me in considerable, legal expense. Being in no difficulties at the time, ,1 made arrangements with the Public Trust Office to take off for 12 months confectionery, soup, pies, etc., for a consideration of £2 a week reduction in rent. 1 must confess that this was a big mistake, for when the 12 months were up and 1 went to see Mr. Gray about starting off again they informed me that tho tearooms had a right ol renewal for a further 12 months, and they ’could not grant me a lease for another year.' Bv this time my business had fallen oil' considerably, and the money taken in the summer had to see me through the winter. “The taxi business was very bad at this time, and to meet the hard times J. passed in my big ear on a small English car, and cut the fare to fid a mile. We did fairly good business for a few months, lint the car was entirely unsuitable for the. work it was called on to do. i kept this car for 15 months, and then traded it in for a bigger and stronger ear, for which 1 paid £375. being allowed £165 on the trade-in. In the meantime I had borrowed £IOO. giving security over my furniture and some of the plant in tiro shop. .1 used this money to finance tho ear deal, and paid the balance to my creditors. “I was now looking forward to a hot ‘summer to help me to pay my way, but was disappointed, as the summer was not much good to us. As the taxi business was at a standstill and my doctor made me give it up, 1 had no alternative but to hand the car back, as 1 could not keep my payments up. I put my position down to bad summers, depression, and the action of the Public Trust Office in restricting niv trading.” I'mler examination by the assignee, the bankrupt stated that lie find been engaged in the taxi business for nine years, lie kept no separate books for the taxi business, but paid the takings into the shop, which lie took over four years ago. Prior to the taking over of the shop he had kept books for the taxi business. At the time he took over the shop the taxi business was falling off somewhat, but lie was still receiving a fair income from it. He had no cash when he went into the shop, lie paid only £lO deposit, and the furnittide and fittings were included in tho purchase price, being secured to .Scholium. The purchase juice was £290, and witness was to pay £1 a week, together with 10s a week to tho Public Trust Office for back rent. Those payments were kept upi for a time. ’ About nine months ago witness raised £IOO on tho security of bis household furniture to pay off back debts and

help finance liim in connection with the new car. At the start the rent was £5 a week. Mrs. Benson had complete control over the confectionery business, and the. banking account was opened m her name. Receipts from the taxi business were paid into the account in Mrs. Benson’s name, but witness maintained an interest in the state of the account, m which at no time was there a substantial credit balance. They always believed that they had suilieient assets to cover any liabilities they had. The assignee: Do you say that . now that you have a, deficiency of £564? The bankrupt: Everything has come very quickly. The loss of the car made a difference to the assets. 'This is a very small business, and the liability is a very heavy one. Have you ever placed your position before your creditors? —No. The assignee stated that lie had found by a perusal of the books that the turnover of the mill fell from £1261 9s Id in 1.930 to £689 10s 2d in 1931, £374 18s 2a in 1932, and £76 for the first two months of 1935.

Further examined by the assignee, the bankrupt stated that ho and Mrs. Benson drew no wages from the business, their drawing being oply for household expenses and necessities. He had einjiloycd his daughter as an assistant in tin; shop, but she received no wages. _ The bankrupt stated that his wife owned no property, and had no banking account other than that for the business. Previously witness bad had a store at Waingake, and the hanking account had then been in his own name. He had paid about £l5O off the, latest car, which he had had for about seven months. The car was taken back about six weeks ago, and lie received no credit oil the car, which had been purchased under a biro purchase agreement. Mr. Alley remarked that lie bad discussed the position with the bankrupt, and was satisfied that it was a case of hard luck. The bankrupt bad little knowledge of business, and did not appear to know whether he was making any profits or not., Mr. Westmoreland- stated that the weekly payments of rent last year averaged £1 3s Id, so that the failure of the business was hardly due to tlie action of the, Public Trustee.

The meeting was adjourned sine die