IN BANKRUPTCY

Southland Times, Issue 21728, 14 June 1932, Page 6

IN BANKRUPTCY

WINTON CONTRACTOR. SUBSTANTIAL DEFICIENCY. A meeting of creditors in the bankrupt estate of John Thomas Butler, of Winton, contractor, was held yesterday afternoon, the Official Assignee (Mr H. Morgan) presiding over an attendance of six creditors. The schedules filed by bankrupt showed that £3741/2/10 was owing to unsecured creditors and £1895 to secured creditors. The estimated value of the securities was £2430, the total assets £lBlO and the estimated deficiency £1931/2/1. The secured creditors were his Majesty the King, under the Discharged Soldiers’ Settlement Act, £275; Ernest Tapper, £1,500 and £l2O arrears of interest. The first debt was secured by a first mortgage over bankrupt’s property at Winton, comprising four acres and a house, valued at £2OOO and the second by a second mortgage over the property at Winton and collateral security by way of sub-mortgages, the principal sums being £430. Bankrupt’s assets included a book debt of £lOO, certain plant, three forestry bonds, 500 £1 shares in the Southern Cross Glass Company and 1000 £1 shares in the N.Z. Underwriting and Development Corporation Ltd. The bonds were fully paid up but calls amounting to £2BO and £lO4 respectively were due in respect of the shares which would then be worth £5OO and £3OO. The principal unsecured creditors were: British Traders’ Insurance Co., Ltd. (Wellington) £2536 12/2; Milburn Lime and Cement Co. (Dunedin) £206 6/6; W. J. R. McCallum (Owaka) £4O 10/1; Hokonui Sawmilling Co., £39; N.Z. Underwriting and Development Corporation, Wellington (calls) £lO4 2/-; Southern Cross Glass Co., Ashburton (calls), £2BO 10/9; Clutha County Council, £39 4/-; Featherstone, Adamson & Francis, £34 2/6; John Brown (Winton), £l4 13/4; Single Profit Stores (Winton) £5 1/7; Otago Daily Times Co., £6 3/-; Receiver Gold Revenue (Queenstown) £7 10/-; J. O. Clapp, jun., (Nightcaps) £26; H. & H. Motor Service, £3O; John Burns & Co., Ltd., (Auckland), £33 11/6; Mercantile Gazette (Christchurch) £6 4/3; G. W. Woods & Co., Ltd., £39; Winton Hardware Co., Ltd., £6; Thomson, Bridger & Co., £2O 9/10; John Edmond, Ltd. (Dunedin), £53 2/1; National Bank of N.Z., £100; Commissioner of Taxes (Wellington), £5O; James Butler, £26; Watson & Watson, £25. In his sworn statement, bankrupt said that he was a building contractor and had carried on business at Winton for the last 12 years. His business had always paid its way until about three years ago, when he ■ contracted for his first marine job, a contract with the Gisborne Harbour Board for the erection of a breakwater. Owing to unprecedented storms arising, and after the job had been washed away three times, he ultimately had to give up the contract, thereby losing over £2,000 he had already put into the work. The British. Traders’ Insurance Company paid for the work to be completed under a contract guarantee bond he had entered into with the insurance company at the commencement of the work. The loss incurred on that job, coming as it had just at the approach of the existing financial depression, did not enable him to pick up again, which in the ordinarly course of events he would have done. He believed a fair amount of extra work had been done on the contract after the Harbour Board took it over and at the time of suggesting to his creditors (in August last) that he be given time to see if his affairs would show an improvement by March of this year, he did not know the insurance company had met that claim. It appeared that the amount payable by him had been fixed by his then solicitor in Wellington as he had no money to fight a case and had to leave it to the insurance company to take what steps it thought fit. He had had no statement of how the claim now made by the insurance company was made up. Certain contracts (with the Otago Power Board), and the Wallace County Council with his brother, Charles Joseph Butler, had been carried out in their joint names. The Ohai Railway Board contract had been taken in his own name. He was chiefly in the North Island when they were being done. His brother ran the contracts, using bankrupt’s plant (which had cost over £2OOO six years previously) excepting a lorry belonging to his brother, the profits to be divided equally. His brother ordered the supplies of material for the jobs in question, these being charged against them both. The joint contracting had ceased after the Wallace County Council contract and they had not worked together since. The amounts owing to Thomson, Bridger and Co. and John Edmond and Co., the only accounts owing in their joint names, had been incurred on the Wallace County Council job, and should ■ have been paid by his brother out of contract prices. The plant owned separately by

bankrupt and his brother had not been put into any partnership agreement. No cash capital had been put into the contracts. He guaranteed his brother’s private account with the National Bank, Invercargill. There was practically no contracting work going on at present and he deemed it advisable, in the interests of all the creditors, to file his petition. He attributed his present position to the loss incurred on the Gisborne Harbour Board contract, coupled with the following depression in business and resultant decline in contracting work. Apart from his plant and sundry assets, he could make no offer to his creditors. He was a married man with a wife and three of a family. The furniture in his home belonged to his wife. In reply to the assignee bankrupt stated that most of his liabilities had been incurred during the last four years. His failure was principally attributable to the Gisborne contract. The insurance company had guaranteed him by bond up to £3OOO, his account with them being the result. He had earned only about £3O since December last. His slucing claim on the Arrow river was of no value. A motion was carried that bankrupt’s discharge be opposed until he paid 10/- in the £l, though only the mover and seconder voted. The meeting was then adjourned sine die.