HAD TO DESTROY COFFEE STOCKS.

Star (Christchurch), Volume XLIV, Issue 78, 1 April 1931, Page 6

HAD TO DESTROY COFFEE STOCKS.

BANKRUPTCY CAUSED BY HEALTH REGULATIONS.

An order to recall and destroy all stocks of coffee essence made by a company in which he was a partner was the reason given by Henry Woodbury Don to-day for his bankruptcy. Bankrupt was described as a manufacturer, living at Kensington Avenue, St Albans.

There were no assets, and the amount owing, all to unsecured creditors, was £1361 17s 2d.

Bankrupt stated that in June, 1927, he went into partnership with L. M. Hill, of Christchurch, the partnership carrying on business in Christchurch under the name of “The Sun-up C 0.,” as wholesale manufacturers and suppliers of jelly crystals, coffee essence and other foodstuffs. They carried on business for about two years, and during that time bankrupt put into the business £7OO, which he borrowed from his father in Dunedin. After two years’ trading they found them'selves short of capital, and the balance-sheet showed that liabilities exceeded assets by £7OO, and that about £ISOO had been lost in trading. . The loss was attributed mainly to the fact that the Health Department had found the company’s main line of coffee essence to be under the standard required by the Food and Drugs Act regulations, even though the company had analytical reports on samples; which showed that the essence complied with the regulations. The company was obliged to recall and destroy all stocks on customers’ hands and destroy its own stocks (which were estimated at 1100 dozen). The loss over that line Was estimated at £9OO. The Ipalance was lost through the 'company being short of Capital through the failure of the coffee essence, which made the company unable to purchase’ on the best markets, and through loss of doscounts on the purchase. Interest in Estate. Following legal advice, continued the statement, a, deed of trust was drawn up whereby all the assets of “ The Sunup Company ” were placed in trust for the creditors until such time as they could be paid in full. Bankrupt also gave an assignment to the creditors of his interest in his grandfather’s estate. A new company formed on behalf of the creditors carried on for twelve months, and then failed. The company was unable to pay the creditors, and the assets were alternately sold and the proceeds used to pay the company’s debts, leaving nothing for payment of old partnership accounts. It was found that bankrupt could not realise his interest in his grandfather’s estate until the death of his father. The trustees, however, agreed to advance £3OO, and bankrupt’s brother agreed to advance £2OO, each receiving security over bankrupt’s interest in his grandfather’s estate. Bankrupt’s father died last September, and the sum of £745 advanced to bankrupt was shown as a debt in the estate. He did not receive anything from the estate; in fact, he was obliged to give a mortgage to each of his two brothers over what was left of his share in his grandfather’s estate to. secure the sum of £163 11s lid to each. That was what was left owing by him to the estate after distribution. He thought all along that his father would have wiped out his debt to him, and he fully anticipated sharing in the estate with his brothers. Bankrupt had no assets, and consequently regretted that he had nothing to offer his creditors. Mr Mawson Stewart stated that he was not clear upon the charges made on the estate by bankrupt’s brothers. The creditors had been misled by bankrupt not revealing the amounts secured by his interest in his grandfather’s estate.

After much questioning of bankrupt the meeting was adjourned, the matter of further investigation being left in the hands of the Official Assignee and Air Alawson Stewart.