INVOLVED CASE

Southland Times, Issue 20045, 6 December 1926, Page 8

INVOLVED CASE

ARREST OF A BANKER DEED OF ARRANGEMENT SOUGHT DECISION RESERVED (Per United Press Association.) New Plymouth, December 4. The arrest of a bank manager at Stratford last year on charges of embezzling and his bankruptcy subsequent to his imprisonment were responsible for involved litigation before the Chief Justice in the Supreme Court. The Deputy Official Assignee asked that a deed of arrangement between William Kerr, now undergoing sentence, and the Union Bank of Australia and others should be set aside as void under the Bankruptcy Act. After lengthly argument decision was reserved. Briefly the position vas that early in July, 1925, it was discovered that Kerr, then manager of the bank at Stratford, had been embezzling the bank’s funds, using them to acquire valuable timber rights on the West Coast of the South Island. J. H. Robson and F. A. Sullivan had an option over these rights and R. R. Binnie was induced by Kerr to lend £lOOO to enable the purchase to be made. Some of the bank’s money was used for the same purpose. On the discovery of these irregularities a deed of arrangement was executed cn July 9, at the instance of the bank, between the bank, I Jobson, Sullivan, Binnie and Kerr. Under the deed it was provided that the timber rights should be transferred to the bank, which was empowered to sell them on any terms it thought fit and to apply the proceeds— (1) in the payment of costs incurred by the bank over the trouble, (2) in payment of moneys stolen (including other moneys than those used for the purchase of the limber rights) together with interest, (3) in payment of £lOOO to Robson, (4* in payment of out-of-pocket expenses to Sullivan, (5) and any surplus to be diridc<l between Robson and Binnie. Shortly afterwards Kerr was arrested on various r.hargrs of theft, sentenced, and was adjudicated bankrupt, and as a result the DeputyOfficial Assignee now attacked the deed and asked that it he Set aside as being in fraud of Kerr’s creditors.