IN BANKRUPTCY

Timaru Herald, Volume CXXV, Issue 18511, 7 March 1930, Page 11

IN BANKRUPTCY

TIMARU BAKER’S FAILURE. A.meeting of creditors in the bankrupt estate of Allan Morris Bryant, baker, of Timaru, was held at the Courthouse yesterday, before the Official Assignee (Mr W. Harte). Mr A. D. Mcßae appeared on behalf of bankrupt. Creditors present were: Messrs P. W. Young (Ellwood and Son), R. Tavernor, J. C. Powell, G. McFarlane, F. Cullmann, R. McKay (G. McClatchy), E. Scott (Distributors, Ltd), L. E. McKeefry (R. Wilson and Co.), and H. L. Butler.

Bankrupt’s financial statement showed that he had the sum of £525/8/11 owing to unsecured creditors, there being no secured creditors. His stock-in-trade was estimated to be worth £l2O, book debts £69/16/9 (which were estimated to produce £65), furniture £2O, and cash in hand 1/6. The total assets were £205/1/6, leaving a deficiency of £320/7/5.

The principal unsecured creditors were:—Cecil Wood Co., Ltd., Timaru, £183; F. Cullmann, Timaru, £25; Distributors, Ltd., Timaru, £36/18/8; Dominion Cash Register Co., Wellington, £45; Ellwood and Son, Timaru, £6B; Fox Chivers, Ltd., Christchurch, £l2/0/6; C. V. Kirke, Timaru, £l2/13/-; G. McFarlane, Timaru, £SO; W. Petrie, Timaru, £23/15/3; Timaru “Post” Co. £4O; Timaru “Herald” Co. £2O; R. Wilson and Co., Timaru, £36/0/11; Ben Watson, Timaru, £l2.

Iri his sworn statement, bankrupt said that he was a baker by trade, and on the 9th. August, 1928, he had commenced business in partnership in premises until recently occupied by him, the terms of the partnership being that his partner was to subscribe the capital, and he was to carry on the active management of the business, on a wage. After the business had been under way for six weeks, his partner withdrew. He applied £SO of his own money towards the purchase of his former partner’s interest in the business, this representing the full amount of capital he had available. Owing to lack of capital, and his inability to employ labour, he spent long hours at work, and was successful in establishing quite a good round. From the outset he had considerable trouble and expense in keeping a second-hand delivery van on the road. As business continued to inc-rease, he fouhd it necessary from time to time to employ a roundsman. Owing to the heavy outgoings in connection with the running of the business, he found it difficult to meet wages, and at different times during the period he had been in business, he had done his own baking, and delivered his own goods by working long hours each day. He found, after the first twelve months’ working, that he had been running at a loss, and in an endeavour to retrieve the position, he rented another shop in Arthur Street as a depot for his bread and small goods. This venture also proved a loss. He had to borrow money to meet his current account for flour and other materials. In a final endeavour, he purchased a new delivery van, and endeavoured to carry on the business single-handed, his wife taking charge of the shop while he went out on his round. He worked sixteen and eighteen hours a day over a long period, but owing to heavy overhead expenses, in the way of rent and instalments due on the car, and the cost of flour and other ingredients, he realised that his only chance was to endeavour to secure a partner with sufficient capital to carry on the business, or in the alternative, effect a sale of the business. Had he had sufficient capital to enable him to put on a roundsman and devote his own time and attention to baking and the management of the business, he believed he would have been successful. During the whole time he had been in business, he had drawn no wages, nor had any wages been drawn on behalf of his wife, who had assisted him in the business. He had the misfortune to poison his hand, and as he was drawn up to his limit with the bank, and had no means of securing further flour to enable him to carry on, he had no option but to file. He understood there was a possibility of the business being disposed of, and he was prepared to do everything in his power to assist in the - realisation in the interests of his creditors.

In reply to the Assignee, bankrupt said that he had been handicapped by lack'of capital from the start, and he was continually spending' money on repairs to his delivery vans. The round had been increasing every day when he had been doing it, but he was then unable to make any small goods, in which there was a big profit.

Mr E. A. Scott said that he had met bankrupt on February 21, when he had assured the speaker that everything was all right. A cheque had come in from bankrupt, and the speaker had sent a supply of flour to bankrupt. The cheque had been sent to the bank the following morningj, and it had been returned.

Bankrupt said that he had poisoned his hand, and that he had been unable to get out to collect sums of money that were owing to him. He had had to meet a promissory note to C. W. Wood and Co. for his van at that time, and his cheque to them must have been paid into the bank and accepted before his cheque to Mr Scott had been. All his previous cheques had been met at any time. Mr Scott said he had had to ring up Mr Mcßae several times about other cheques of bankrupt’s. To the Assignee, bankrypt said that the cheque was good when he had given it to Mr Scott.

The Assignee: “It was evidently a toss up between Mr Scott and the C. W. Wood Company as to who ; would obtain the money first. Mr Scott asked bankrupt if anyone would buy the round, and bankrupt said that this was quite possible, but why he had not disposed of it before was that he was waiting for a prospective buyer, who was coming up from Dunedin that day, to look at the entire business. The round, in his opinion, was of value, and his customers had informed him, when he had told them of his position, that if he was to be employed with another baker, that he could rely on their trade. The total number of customers on the present round was 354, but if he took up those rounds that he had been forced to drop, this number would increase to nearly 700. He delivered at present 950 loaves a week, including the Hospital supply. To Mr Scott: He intended selling the business as it stood, including utensils and plant. Mr Young said that his firm had had financial dealings with bankrupt, and on the statements that bankrupt had shown him from time to time, including the number of loaves delivered, and the overhead expenses of the business, bankrupt should have been making a small profit, but instead he was going back. Bankrupt had been a client of his firm since 1928, and he had always understood that the only debts that bankrupt owed were to the bank, and for flour. Evidently bankrupt's ups had been downs. The Assignee. Bankrupt had merely volunteered what information had been asked, and no more. To the Assignee, bankrupt said that, he had received, on the average, £2lO a month. He paid out per month, £95 for flour, coal £4/15/-, rent £ls, car £l2, yeast £2.15/-, petrol £5, and several other small amounts for currants, milk, etc.* that it was necessary to have for baking. The remainder of

the monthly takings were swallowed up in trying to pay off back debts. He did not keep his own books, which -were kept by a book-keeper in town, but he reviewed his position about every three months, and was able then to see just how he stood. To the Assignee, bankrupt stated that if another man was running his business, he would charge the same rate for a loaf that he had been charging. A loaf cost about 71 d to produce, and he had been selling the article at 1/- cash, delivered. To Mr Scott: He knew of other bakers who were selling bread at this price. To the Assignee: If his creditors would allow him to go on with his round, he would be in a position to make them an offer, otherwise he would go back to work. He had been in the trade for 25 years, and knew what he was talking about. The Assignee: Bankrupt’s job was to help his creditors by all means within his power, and he must not take up the attitude of dictating to them. To Mr Young, bankrupt said that all the fittings in the place were in good order, and had been looked after. Mr Young moved that, provided there was a hire-purchase agreement between bankrupt and the vendors, the cash register be handed back to them.—This motion was carried. Bankrupt stated that all the book debts could be easily collected, as he had written off all the bad ones. Mr Young moved that it be left in the hands of the Official Assignee to dispose of the business to the best advantage.—This was carried. It was further decided that bankrupt be allowed to keep what furniture he possessed. In asking the creditors if they would favour his client with his discharge, Mr Mcßae pointed out that bankrupt was a married man with three children, the eldest of whom was in delicate health. Bankrupt had stated that he was desirous of helping his creditors all he could, and he appeared to be a worker, and a competent tradesman. In reply to Mr Young, as to whether he would be able to make any offer to the creditors after the Assignee had settled the estate, bankrupt said that he was not in a position to offer anything at present, owing to the expense entailed through his daughter’s illhealth, and the general upkeep of his home.