REMARKABLE CASE

Timaru Herald, Volume CXXXIX, Issue 20067, 26 March 1935, Page 11

REMARKABLE CASE

SOLVENT “BANKRUPT” MAKING A FRESH START What was termed a most remarkable case come before the Registrar in Bankruptcy in Brisbane recently. Owen Stanley Gardner, proprietor of a business known as Owen Gardner and Sons, Limited, cordial manufacturers, of Fortitude Valley, had filed his own petition in bankruptcy, although the official receiver Mr J. D. Keenan, stated that the business could and in fact had paid 20s in the pound. Mr Keenan said that Gardner could have disposed of the business and been several houndred pounds in pocket after paying 20s in the pound. But he had chosen to use the Bankruptcy Act as a means of straightening out his business, and to give him a" fresh start. Gardner had agreed to become bankrupt, the business, which had been handed down from father to son since 1850, having been sold to Robert James Sweeney, who had paid off all liabilities and given Gardner an interest in the company and a job as well. The latter had filed his petition in bankruptcy on January 24, the liabilities of the company being £1231 unsecured and £2922 fully secured. History of the Business In evidence, Gardner said that the business had .been established in 1850 by his grandfather, the original Owen Garner. The business had passed to the son, Alfred Gardner, who in turn left it to witness. Witness was his father’s sole beneficiary under the will, but the business was left in the hands of trustees, with the proviso that they should carry on the business until Owen was 30 years of age. The petitioner went to America for some years. The business came into his sole charge in February, 1930, said witness. For some time prior to this the business had been conducted by the trustees at a loss of about £IOOO annually. For seven years this loss had continued. When he took possession of his inheritance he placed a manager in charge and gave him full control. Prior to his decision to file a petition in bankruptcy he consulted his solicitors, who advised him to take that course. At that time the business was actually solvent, and he could have paid 20s in the pound. But he wished to get rid of his liabilities and pay them up in full. Witness said that the official receiver had received an offer from Robert James Sweeney to purchase the business and pay all creditors secured and unsecured in full. Witness could have sold the business before this date for a sum which would have paid 20s in the pound, and given him a few hundred pounds over. He preferred to allow the tmatter to come before the Bankruptcy Court, and allow Sweeney to purchase the business from the receiver. Rather than have a few hundred pounds and be out of work, he preferred Sweeney to take the business, as he had every faith in his integrity and business acumen. The Better Proposition Moreover, continued witness, Sweeney still gave him an interest in the business and a job as well. That he considered a better proposition than a few hund-ed pounds in hand and no job to go to. He had decided to throw in his lot with Sweeney. He thought that that was in his best interests. Addressing the Court, Mr Keenan said that it was a most remarkable case. The books of the firm had been properly kept and regularly audited and balance-sheets were regularly taken out. Everything there was in order. There had been no offences against the bankruptcy laws in any shape or form. Gardner had used the Bankruptcy Act ir-’-ely as a means of liquidating his assets, getting a clearance and making a fresh start. Gardner. Sweeney and all the creditors were well satisfied with the arrangement. The Registrar remarked that it was obviously a satisfactory arrangement for all concerned. The inquiry was thereupon closed. Although Gardner is an adjudged bankrupt, Mr Keenan explained afterwards. he could get his discharge almost immediately on application.