THE OPUNAKE HOTEL.

Taranaki Herald, Volume LII, Issue 187, 11 September 1909, Page 4

THE OPUNAKE HOTEL.

A meeting of creditors in the estate of Lancelot Black, hotelkeeper. of Opanuke, was held at the office of Mr. J. S. S. Medley, the Deputy Official Assignee, yesterday afternoon. Mr. T. S. Weston appeared for the DjO-A., and Mr Johnstone for the bankrupt, who wss present. The creditors attending were Messrs T. Knowlea, T. C. Schtiacken- • berg (L. D. Nathan and Co.), Watt (J. O. Swan and Co. and Wanganui Brewery Co.), F. Ralfe (Ralfe aad Archer and five other Opunake creditors) and Midliu (Opunake). 1 The statement submitted by the bankrupt showed estimated assets £1108 Is, and liabilities £934 3s. Mr. Johmtone explained the circumstances leading up to the bankrupt's present position. Up to June, 1906, he had teen proprietor of a hotel at Bui'*. In that month he Bold out, receiving £1200 or thereabouts. Of that be gave £300 to his wife in consideration of her faithful assistance in conducting the business, and about £300 was absorbed in paying various accounts, leaving him £600. He did. not go into business again until May, 1907, when he purekisedthe goodwill of J,be Opunake Hotel, at Opunake, for £729. He put in £590 of hw own, and borrowed the balance required, as well as some money for current accounts, from Messrs J. O. 6wan and Co., his total liability to them being iJ3SO. He had previously done business with them at Buljs, and they took no security, but the bankrupt un dertook to repay the money at the rate 1 ot £6 per month. He soon found that he needed a great deal more moaey to 1 enable him to carry on the business property. He spent £200 or over in im1 proving and renovating the property. He made default to Swan and Co., and > after six months' occupancy had +•> borrow £160 from his wife. He subse- ' quetly borrowed another £150 from W. S. Tuck, and this loan he repaid. It was by this time apparent that the business, was not going to pay, so' he put it in the hands of agents and brewers' tia1 Tellers in an endeavor to get rid of it. The property was, however, not sold, for 1 the lease would expire in 1010, and there was not sufficient inducement. Negotia1 tions were hampered, too, by the terms of his agreement with Mr. Knowles, his landlord. Recently Swan and Co. amalS nutted, with another firm, and formed c Wanganui Brewery Co. They were > anxious to collect their old accounts, and issued a writ against Black for the amount of various p.n's. Default was made, and, further proceedings threatening, the bankrupt had to file to protect the other creditors. He attributed his failure to a general depression in trad?, and to the fact that the working expenses were too high, over £18 a week. The takings, of course, varied, but they were not such as would allow a reasoa- ' able profit. The list of assets and liabilities submitted by the bankrupt I himself estimated a credit of £160, and, even discounting estimated assets considerably, it was not anticipated that the creditors would lose much, if anything. Mri Watt said that with all due deference to his legal friend, he thought the bankrupt should have followed th-? • prescribed and usual form of drawing 1 cut » statement showing the "wherefore*; and whereases" of hi* position. Thai had: not Wen done, and the statemeat by the bankrupt's solicitor was of no xeal value. , Mr. Johnstone said that as Mr. Watt was deferring to his views, lie would like to point out that the bankrupt was under no legal liability to present stteh a statement. He was quite willing to do so, however, and would have done had he had time. The D.O.A. said he intended to put the bankrupt on oath, lor there was insufldent evidence of his dealings. They bad * book showing the takings, but there was no record of the expenditure, except the bank-book. Tie bankrupt was examined on oath. Be stated that his total capital whtn lie went in ,to the .hotel, Including, the £880 from" Swan ana O>l, was £660. The purchase price for the goodwill of the leasf was £725. •' There was no furnitaxe ia the .house them. The takmss at first avenged about £4Q, ranghg fro*; £15. Us to £Sjt llsi Then they felt off. From January Ist, 1909, to August 81st last the takings ran«ed from £17 lfs to fco £38 17s fid, averaging Tather less tbUlieSO ft week. The average takings for ' the past time months w«re under, £$3,a <week. The total takings from January to the end of August were £983 lfs 3d, The bankbook showed that during that time he had paid in £1180 11s «d, or £177 more than his total taking*. Mr. Watt: How, do you account lor thatt Where did that £177 come froaj! If that is a correct record,, how do you account for the fact that you banked £177 more than your cash-book shows you received? The bankrupt said his figures were correct, and' were entered night by night. He had banked the proceeds of a sale of some cows, and an amount won in a Tattersaß's sweep. To Mr. Medley: The average receipts were not £56 a week; hardly half that. The D.OJL produced a couple of letters written by tike bankrupt, and pointed out that ia one of them lie had informed Swan and Co. (who, were to- try to «eH the hotel for him) that his,avsrsgtt taking! were £86 or £56 * week. Bankrupt seid there w« nothing very remarkable about that Every hotelkeeper endeavoring to sell his . house gave similarly exaggrated figures. He admitted having forwarded «im9ar "par. ticulars" to Mr. Major as his ageat for the disposal of the house. Continuing under the D.OJL'a examination, the bankrupt stated that he had givea no money to' hift wile before he filed, aod that he had disclosed the whole of hw assets. He had kept so books other than that produced. His rent was £8 » week, license 15s 4d, insurance £1, xatee 10», wear and tear £1, staff £5 10a, lightipgond fuel £1 ss; about £18 a w«es> Hi« personal and family expanse* should not be more than £2 a week, and those were paid by cheque. The Wttf&er aid baker hnm. paid cash out of the tiH, and occasionally other small amounts. He had no expectatin of inheriting any money or property.' Mr. Watt cross-examined ibe bankrupt at some length concerning the detail* of a conversMipn, between them recently at Wangamu. Bankrupt admitted having informed Mr. Watt that there WftS no hope of his meeting a bill of Swan and Co.'s as he had to pay £111 rest, but he had not implied that he had been saving that money. Mr. Watt contended that he had been led to believe the rent-money was in the bank. As a matter of fact, the rent wasn't paid at all. Bankrupt: I said "there's no chance for you to get it Come and have a drink." iAnd they had one. fit answer to Mr 5 . Gfehnaekenberg, the bankrupt said he bad kept no account of payment* in cash out of the till, bat those payments would bf J»e or six shillings a day. Tt Wai quite impossible for him. to pay working expenses out of the neetpjte. • He bad bad' to Iwrr'ow money repeatedly ttom hie principal creditor to keep him going. . To Mr. Balfe: It wa» hardly possible to make the house pay on £40 a week! He couldn't say what hie liquors an 4 general stock cost him, and he did mot know the margin of profit. . An irregular discussion took place concerning what were actual working expenses, Mr. Watt contending that th« Iceasee should be content with drawing \i» board and lodgng, etc., out. of the butffaegs, and Mr. Balfe espousing the claims of the licensee to have come cast return ftp his 'Cme. ' ' ~ Bankrupt (fsoetiously) : Well, I have not been eating much this last three days; so it won't cost orach. Mr. Watt: You should eat less, and then you'd drink more; eat more, and drrak less. Tfcte bankrupt: I notice you tried to tempt me to-day, but I wasn't having any. The D.OA. asked the meeting to defide what to do mith the business; whether to carry on the hotel until the expiry of the lease, or to sell it by auction. The bankrupt had had an offer from Mr. Major, and that might still hold good. I Mr. Muffin was of opinion that the < house could be made to pay, sad iH 1 takings increased to between £40 and 1 £50 a week. i Mr. Watt said that the creditors' i duty was to find the quickest and most J profitable way of realising the property. 1

He made an offer to take it over naxt day for *o much cash, stock at valuation. He considered that the bankrupt's value of the furniture was a *air price to pay, for there was no goodwill in a nine months' lease. He objected to any suggestion of carrying on the busi- , £98 for the creditors, his experience behig that when a man was put in charge ] of a hotel it was "no good to the other fellow." Tn discussing the offer, it was mentioned that the rent at <ir»t payab'e j was £9. It had been reduced to £8. with the proviso that if lie sold be would have to pay the difference between £8 and £'J a week during '»i3 l term of occupancy, and the incoming man must pay the* £0 a week also. Mr. Knowles intimated his intention of claiming the difference in the event of sale by the creditors, or if they earned on the house. Change of tenancy entitled him to charge the amount. Mr. Johnstone said that the D.O.A. could disclaim the lease. Mr. Watt: Then the landlord wou'd have to take over and «ell the furniture at valuation or by public auction. How would he like thdt? Mr. Watt said he would repeat his offer and fight Mr. Knowles, if necessary, in the courts. He urged that the meeting could accept his offer if they were unanimous. Counsel was ot different opinion, jJointing out that the majority of creditors I were unrepresented and that sale by private treaty was possible only when auction and tender had failed. The D.0.A., acting on this advice, sa>J he did not feel justified in accepting the offer. Mr. Bchnackenberg moved that he DjOA. be requested to call tenders for the sale of the estate, and that he be authorised to complete the sale at snea time and upon such term* as he may decide. Mr. Mullin. seconded. Mr. Ralfe moved an amendment that the reserve be £600. He seconded 'he Amendment by one of his proxies. The amendment was incorporated in the motion. Mr. Watt moved (on behalf of J. G. Swan and Co.) that the Assignee accept the offer of cash for the good- 1 will and furniture of the Opunake Hotel, j stock to be taken at valuation. He seconded the motion on behalf of the Wangamti Brewery Co. Mr. Weston, aeked for an opinion, ad vised that the D.O.A. could not accent this amendment, or the offer. He coind do so at his own risk, of course. The motion was carried. The meeting then adjourned.