BRINSLEY AND COOPER.

Wanganui Chronicle, Volume LXXVI, Issue 18248, 5 August 1921, Page 5

BRINSLEY AND COOPER.

PUBLIC EXAMINATION. THE ILL-FATED GOTHIC. MOVE LEADS TO DISASTER. A public examination into the afI fairs of Brinsley and Cooper, bankrupts, was held yesterday before Mr T. A. B. Bailey, Registrar of the Supreme Court. Mr C. C. Hutton appeared for the D.0.A., and Mr Turnbull looked after the Interests of bankrupts. Creditors were represented by Messrs Atkinson, Richardson, Tilyardi and Bennett. Claude Charles Brinsley said that after his discharge from the army he purchased in January, 1920, Mr Goulds’ business in the Avenue, putting in £125 of his own money, £3OO from the Government, and £325 of private loan. In September he took out a rough balance-sheet or statement of assets and liabilities, which showed a surplus of about £7OO, but it did not include the £325 loan, £5O to C. Bird, and £2O to £5O to ,his father. When these loans were taken into account there was a deficiency. In October he bought the lease and contents of the “Gothic” with the purpose of selling the plant and turning the place into an upholstery establishment. The price was £5OO down and the balance in six months. As to paying for the “Gothic,” Mr Cooper stated something about an amoiunt of £l3OO or £l4OO which he could pift into the business. Bankrupt took his word that he would put the money in. He made no promise, beyond the verbal statement that he could get the money. The partnership was to be on equal terms. After he bought the “Gothic” he received £250 from Cooper. As Cooper could not get the money at once, it was borrowed. Bankrupt, on the advice of Mr Pease, estimated they could get about £450 for the contents of the “Gothic.” Part of the contents were sold by auction. The chairs and tables were left on their hands, but the chairs were used to fulfil a contract for the furnishing of the R.S.A. The chairs were under a bill of sale to Mr Carmanie, but bankrupt did not account to him for the sale of the chairs. Mr Hutton: Why not? Bankrupt: Because .we never had the money. Mr Hutton: There was the money from the R.S.A. TRYING TO FORGET. Bankrupt said he could not remember the events of a year ago. He had a lot of trouble and he had endeavoured to forget the unfortunate business. There must have been some reason.

Mr Hutton: Did you not want to pay him? Bankrupt: I wanted to pay him. Mr Hutton: Then it is strange that you should forget why you did not. Bankrupt said he could not say what was the reason. He must have forgotten. He did not deliberately pay the other creditors and ignore Mr Carmanie, but he did not remember the reason why he did not pay him. He remembered in his statement to the Assignee saying: “Never thinking about Mr Carmanie’s security we used the proceeds of the sale of the chairs and anticipated receiving some of our book debts sufficient to pay this amount in the course of a day or two.” Bankrupt said he had refunded two sums of £5O to his father after he went into the “Gothic.” The sums which he borrowed, from his father were just for a day or two and he therefore paid them out or the first moneys he received. He did not look at it in the way that he was giving his father priority over other creditors. MISLEADING BALANC-SHEET, He saw Mr Atkinson frequently. The balance-sheet giveu him showed that the assets exceeded the liabilities by £475, but did not include some loans, which would have shown a deficiency. They were omitted with the best of intentions. He did not think they -would be pushed for at any particular daft. He looked upon them as practically his own capital. He did not consider it would be misleading to Mr Atkinson. The business was a good business then. in November a statement was prepared which showed assets £4051, which included £961 good-will for the two shops. He arrived at £250 for the upper shop as it cost him £3OO to go in, but that was for his lease as well as his business. Bankrupt had let the shop at £6 a week, while the rent to his landlord was only £3, and the lease had 21 years to run. Therefore he reckoned it was worth £250. Mr Bailey: I suppose it was. Continuing, bankrupt said the goodwill for the “Gothic” was the difference between the cost of the place and the proceeds realised from the sale of the contents. In the statement were liabilities totalling £3322, leaving a suiplus of £728. There had been omitted from the liabilities an amount of £325 lent him by Mr Porteous. It was omitted for the same reason as were the others. The £5O to Mr Bird was also omitted. Bankrupt gave Mr Atkinson the September balancesheet because he asked for it. Bankrupt said he knew when the balance-sheet was asked for that if he did not supply a decent balancesheet the firm would sue. Mr Hutton: Was that not dishonourable?

Bankrupt: I did not think so at the time, and I do not think so now. Mr Hutton: Why is it not dishonourable to give a false balancesheet?

Bankrupt: I do not concede that It is a false balance-sheet. He left out the amounts because he thought they would not be pushed for. They had not been paid. In the November balance-sheet loans from his father and Mr Bowron were included because ll they were due on a date. Bankrupt did not think

it was misleading to give a balancesheet which did not include the loans for which he did not think he -would be pushed. Mr Atkinson was given the November balance-sheet because he must have asked for it. Bankrupt did not think he was purchasing anything at the time. He owed Ross and Glendining £4BO. He had promised Mr Atkinson that as soon as the “Gothic” sale was completed he would pay £4O 0. But ail the contents had not been sold. PROSPECTS OF NEW CAPITAL. To Mr Atkinson: The fittings in the “Gothic” (£643 9/6) were covered by a bill of sale. Only £475 was included as a liability. Bankrupt did not think that asking for a balance-sheet was pressing for 'payment. He knew that if a satisfactory balance-sheet was not presented Ross and Glendining would sue. Bankrupt did not think he was doing wrong in omitting the loans. He would not have done it otherwise. He had said that with the advent of a partner there would be approximately £2OOO fresh capital in the business. When the capital materialised he undertook to pay Ross and Glendining’s account. With Cooper’s advent into the business Mr Atkinson was not given to understand that he had the capital. Cooper did not bring the capital. Bankrupt remembered meeting Mr Gregg, the accountant, and he gave Gregg and Atkinson to understand that he still had hopes of getting the £2OOO new capital spoken about previously, and he (bankrupt) told Gregg that all would then be plain sailing. Mr Atkinson: Did you not mention specially that Cooper’s father was coming to his aid with £2OOO.

Bankrupt: No. Bankrupt added that after taking over the “Gothic,” Cooper went to Eketahuna ana when he returned he said he could not get the money. Mr Bailey: But then you were committed to your contract. Continuing answers to Mr Atkinson, bankrupt said he had promised to pay the account after disposing of the contents of the Gothic. He expected to realise more on the sale than he did and he was disappointed at the turnover In the new .premises. DISAPPOINTING VENTURE. To Mr Bailey: Ha was doing well in the old premises, but they were too small. To Mr Atkinson: He had been too optimistic about the sale of contents and from the usual business. He evidently gave Mr Gregg hx understand that £5OO would come out of the sale of “Gothic” furniture. He did not tell Mr Gregg there was a bill of sale on the • contents. He thought that if he saw a reasonable chance of ratsing the money secured by the bill of sale within the time specified, there would be no harm in selling property covered by the bill of sale and diverting proceeds

to the payment of other debts. “But you knew better than that,” said Mr Atkinson.

Bankrupt: No, it is the first bill of sale I have ever been connected with, and it will be the last. I have done a lot of things .that I have thought over during the last 6 months."

Mr said he bad done wrong. To jS»- Atkinson: It was not a fact that he was hopelessly involved before leaving the top shop. A man would be a mug to transfer from one shop to the other- if he thought he was hopelessly involved. He was optimistic about the transfer. “You were that,” said Mr Atkinson. To Mr Hutton: When he paid his father on November 27tn £5O which had been borrowed on August 24th, he did not consider that he w-as giving him a preference. He did not know it was wrong at the time. To Mr Richardson: He expected considerable new capital in October, but did not get it. To Mr Turnbull: He enlisted in August, 1914, and was demobilised in January, 1920. He considered the position of the “Gothic” was good, being next to the biggest shop in town. He specialised in upholstery. Cooper expected to get £l3OO or £l4OO from his father. Trade was increasing and bankrupt thought he was going into the new shop for the best time of the year.

The loans from his father were only temporary and without security. The balance-sheets were prepared by himself. The auction sale was not a success, and the final sale of his estate was at about 2/G iu the £ of the estimated value. COOPER’S EVIDENCE. Peter Henry Cooper said he may have said that he hoped to get an amount up to £l3OO. He remembered saying at the meeting of creditors that ho did not tell Mr grinsley that he could bring £l2OO into the business. There w r as no discussion about any amount.

Mr Bailey: Did you mention £l3OO or not? You may as well be candid about it. Bankrupt said that a few months previously his father had asked him if he intended going into business, as he would have some money short ly. -Witness then said he had no intention just then. Later he took up a position in Brinsley’s shop as salesman. One day Brinsley told him about the “Gothic,' and as they both thought it was good Brinsleyasked if he could help with the finance, and witness did tell him he could get some assistance from his father, but he could not say that he stated any definite amount, but he may have told Brinsley what his father had told him. Bankrupt approached his father (after the “Gothic” had been taken over), but by that time his father had made advances to another brother and bought a place for himself. Mr Turnbull: Did you ask your father for any definite sum? , Bankrupt said he got £250, and asked for more, but could not get it.

itir Bailey: Pity you didn’t find out about that before going into the “Gothic,” It would have saved you and Brinsley a lot of Double. There being no more questions, Mr Turnbull asked for an order declaring that the examination had been completed. Mr Hutton consented, and the order was granted.