“RUN ON AIR.”

Wanganui Chronicle, Volume LXXVI, Issue 18432, 16 March 1922, Page 9

“RUN ON AIR.”

WANGANUI MOTOR COMPANY’S BANKRUPTCY. CREDITORS TO GET NOTHING, “A HOPELESS MESS.” Mr. E. M. Silk, Deputy Official Assignee, yesterday conducted a meeting of creditors in the estate of the following, recently trading as the Wanganui Moror Company:—R. G. Edwards, M. W. F. G. Beauchamp, A. Rowan, J. G. Henderson, R. Lazarus, F. Hawkins and T. Crocker. It was stated that Edwards, who was in hospital, was unable to be present. Mr. Wills was present on behalf of the bankrupts. There were about twenty creditors and their representatives iu attendance. Mr Si’k said the bankrupts were all mixed up in the Wanganui Motor Co. and he thought the best way out of the business was to hold first of all a meeting of the Company. Legal opinion supported this view.. STATEMENT BY T*HE COMPANY. Mr. Wills submitted the following statement to the D.O.A. which after being read was signed by each of the bankrupts present. The statement was as follows: Business commenced May 19th 1919, in premises leased from George and Kersley tor one year at £2 per week. This was an association of five individual taxi proprietors who organized to fun a taxi hire business, choosing the r-j.me of the "Wanganui Motor Company” as being a good trade name to catch the eye of the public.

Each member of the company paid £1 per week to defray the expenses —-rent, telephone, advertising, sab aries, etc., and the taxi work was allotted to each member on a pro rata basis which worked quite successfully. Under this scheme the business grew -:nd the five cars could not cope with the ‘work- On completion of the first year’s lease of premises we began negotiations for Purchasing the Opera House Garage leasehold property and although we were advised by our bank manager and others interested in our welfare that it was a iisky speculation, as being without capital to call upon, we persevered ?n our efforts to raise a loan. Up to this time we had not experienced anv difficulty in meeting our monthly accounts on due date, and we had increased our membership to eight, each of whom financed their own car and its upkeep independent of each other. The whole eight partners were unanimous in their desire to get possession of the Opera House Stables, believing that the revenue from horse accommodation and motor car storage would meet all expend’tures, and we eventually purchase! the property for £2,500 cash, which was all borrowed capital . A few days’ actual experience convinced us that horses and motor cars could not carry on together so we set to work and ripped out the horse stables; other improvements followed ami financial problems began to appear. All the partners were still sanguine that the garage receipts would meet the liabilities and matters drifted on month by month, until finally in February 1921 there was a mutual dissolution of partnership, the continuing partners believed that by appointing a manager that the business could be carried on successfully, and we advertised in Hie local and Wellington papers, our intentions then being to form a registered Limited Liability Company. Mr. McGregor, after examining the company’s books and general affairs, was appointed manager at a salary of £6 per week and invested £2OO *n the business under agreements with the partners to pay in all their cashdo him and draw just sufficient to live on until the bills were all paid. Messis McCaul, Collins and Howie, with whom we had conferred relative to the proposal from the Limited Liability Company, advised us that nothing could be done until the outstanding accounts were ail paid. Just about this time we began to feel the effect of the trade depression and business began to fall away with the inevitable result that each of the partners being heavily handicapped with mortgages on their cars and other expenses were unable to keep to the agreement made with the manager. Mr. McGregor, who was unable to carry on successfully his arrangements to pay instalments to various creditors. At this stage, we began to put out feelers with tire view of disposing of our interest in Ihe Opera House Garage and thus paying all cur liabilities in full. On May 6th, 1921, we signed an agreement through Mr. J. Coull, acting on behalf of Windelburn Bros., to sell out the Opera House Garage for the sum of £3,100 and to give possession on May 9th on which date they were to pay £SOO deposit, a further £2OOO iu a month, which period was considered necessary for lease perusal and adjustment, and the balance ol £6OO on promisory note at six mouths, given by Charles and Harry Windelburn, of Windelburn Bros. On the morning of the 9th we had cur telephone removed and all arrangements ready and Windelburn Bros, sent up one car and a lot of oflice gear, etc., and officially took possession. On applying through our solicitor for the £SOO to be paid over as per agreement, this was refused by solicitors acting for Windelburn Bros. owing to the lease not being ava .able for perusal The date of posses»ion was eventually fixed at June 9th. and the transfer was duly signed by the whole eight original partners who were vested each and individually as owners of the leasehold property. Had this arrangement been faithfully carried out the estate would have paid nearly 20s in the £ as at that time a statement drawn up at the end of May, when one of the partners dissolved from the business, showed the assets

as approximately equal to the liabilitie.

LIABILITIES. The liabilit es were £1897 12s 6d, less contras £99 8s 6d—£1798 4s; other liabilities £3ll 16s 8d; total £2llO 0s Bd. Assets, £660 18s 6d, showing a deficiency of £1449 2s 2d. UNSECURED CREDITORS. Unsecured creditors were:— A. S. Paterson and Co. £207; Arams and Boyd £7 7s 6d; Taylors Ltd. £2 Is 6d; Allen Bro-,. £3 2s 6d; Dominion Publishing c>. Wellington £27; “Chronicle” £sb 16s; Herald £52 2s 4d; Levin ami Co. £179 0s 6d; A. D. Willis £lO 17s 3d; J. Swainson £8 2s; N.Z. lyre and Rubber Co., Wellington, £,’2 3s Id; D. Murray £3 13s 8d; Mailing and Co. Ch’ch. £l7 4s lOd; Silk, Howarth and Co. £22 16s; Nat..ess, Harris, Wellington, £6 9s; Dominion Motors, Wellington, £37 l's lid; Dunlop Rubber Co, Wellington £63; Horsley and Tustin £4 4s, Thomson and Delhi, Wellington, £1 10s 8d; Trade Auxiliary Co. Ch’ch. £2 3s 6d; J. H. Oldham, Napier, £165; S. Garner £2 Os 6d; Owles £1 2s; Holm and Co. £l5 10s; Treadwell, Gordon and Brodie £7 4s 6d; Newcombe and Coy £9; D.I.C. £l4 8s 6d; Lewis and Co. Gisborne, £l6 Is Jd; Tjngey and Coy. £l7 6s; Inglis Bros., Wellington £1 7s lOd; Cornish £2 12s 6d; Vacuum Cleaning Co. £8 17s; R. J. Bell £6 6s; Evies and Howell £5 0s 6d; Wilkinson and Cowley £3 17s 6d; A. H. Coe £1 12s 6d, Bassett and Co. £1 8s sd; Boyd aud Brennan £l3 8s 6d; United States Rubber Co. £4l 5s Id; Alex. Bogle £l2 15s 6d;'Geo. Sigley £29 15s 6d; Simms and Son, Ch’ch. £271 ss; Pateison and Mossman, Napier £125; G. McGregor £200; E. Reynolds, Wellington £5 7 4s 6d; National Electric Co. £ll 3s 6d; Stone 18/6; H. Hooser £1 13s 6d; Fry and Treloar £1 15s lOd; Tregle, Smith and Son £2 4s lid; Maunder 8s; Campbell and Co. £7 7s lid; Snow £25; Purser’s Ltd. £2O; R. Russell £l9 10s; total £1897 12s 6d. INDIVIDUAL POSITIONS. The individual positions were:— Beauchamp.—Unsecured creditors. £l9O Ils 9d; secured creditors, £l7O 16s 8d; less estimated value of securities, £350; total assets £179 3s 4d; deficiency £ll 8s sd. Lazarus—Nil in all instances. Hawkins—Unsecured creditors, £9 9s lOd; secured creditors, £597 3s 2d, less estimated value of securities, £450; total debts £157 3s; book debts £l7 8s 6<l cash at bank 13s 3d. Edwards.— .Statement incomplete. Henderson. —Unsecured creditors, £322 7s lid; assets nil. Rowan—Unsecured creditors, £l6l 15s 2d; secured creditors, ,£9BO, less estimated value of securities £9 50; surplus io contra, £3O; total debts, £l9 L lbs 2d; cash at bank, £9 Ils 8d; deficiency. £lB2 3s. 6d. Crocker.—Unsecured creditors, £338 15s; assets, nil; total debts, £338 15s.

BANKRUPTS INDIVIDUAL STATEMENTS. M. Beauchamp, in a personal statement, said that he was paying his way since going on his own last year. If the continuing partners in the company 1 had done their part they would have come out all right. R. Lazarus said tuat if he had kept to driving for himself instead of going in with the company he would have not been in his present position. Had the sale of the lease gone through everything would have been in order. F. Hawkins made a similar statement, as also did A. Rowan and J. Henderson. T. Crocker had presented no statement, and Mr. Silk asked him why he had not sent in a written statement. He sail Mr Wills, who was acting for the bankrupts, had great difficulty in getting thqm to do anything, and was chasing them for a considerable tine. Itfr. Wills had said that the bankrupts were the most casual let he ever had anything to do with. There was no statement bv R. Edwards, who has been in hospital for some time, and was unable to attend to the matter. THE COMPANY’S TRANSACTIONS Mr Hussey intimated that he desired to question the bankrupts, whereupon the D.O.A. asked who was the “king pin." R. Lazarus was then questioned by Mr .Hussey (for Simms and Son, Christchurch). He said that the Opera House stable lease was purchased for £2500, of which £2OOO was obtained by a mortgage from Mr. Morrison and £5OO from a bank. The lease was subsequently to be sold for £3500. but the deal fell through. Then Windelburn Bros, bought half the lease for £6OO, and Ulis went to the lawyers, who paid out of this amount legal expenses and judgment summonses issued against the company. He, and net his wife was a. partuer in the company. The car he was driving belonged to his wife. The account of Simms and Sot. was for benzine, and the company was not insolvent at the time of the purchase. He bought ten shares in Combined Buyers. The price they paid for a section was £3450. The Combined Buyers took this over and sold out to Combined Motors, and they were now in liquidation. Their '.-hares were forfeited. Two houses s.uld off the section brought £9O. Edwards had not lent £2OOO to the company, but it cost him (Edwards) money. The individual members of the company bought their benzine from the company, which was charged against their acA count. He was very often in credit. He knew a man named Collier, who was representing Combiqed Motors, and ho said the most they would put into the project was £5OO. Witness was to manage the new company. The advertisement in a newspaper saying that the Wanganui Motor Company was a registered company was untrue. The manager of the Wanganui Motor Company, T. McGregor, put in £2OO and he was to receive 2$ I er cent of the caslp. receipts, Resides £6 a week. Mr Hussey: Wasn’t it a fact that your business was insolvent from the start? —No. A sa matter of fact, you embarked on a £3OOO deal with nothing.— That is correct. The whole business was run on air? Edwards had money?—Yes, he had money. Tney ran the business on mortgages. When they first started the Wanganui Motor Co.,

they owed the D.I.C. two months rent. The rental of the Opera House garage was £165 a year, the rates amounted io about the same, and 1U per cent interest came to £2OO, making a total of about £530. Mr. J. D. W. Mcßeth interjected that the rates came to £62. Continuing, said that the deficiency was about £2OOO, and that was not from the Opera House garage and stable. He reiterated that they were not hopelessly insolvent before they went into the Opera House garage. To the D.O.A..—He was a bankrupt during the war when in Wellington in business as a poultry farmer. His liab lilies then were £3OO, and the assets nil. The creditors took no action in the matter. There was no deed of partnership, but there was a deed of dissolution of partnership. Mr. Cunningham said the date of the deed of dissolution was February 1921. Four of the company w'ent out on that date, continued Lazarus. They were Rowan, Crocker, Beauchamp and Hawkins. Thomas McGregor, an insurance agent said he put £2OO into the company. He was not a partner. The D.O.A. said there were no assets to pay for any investigations. If the creditors were prepared to pay they would go further, but he thought it was a hopeless mess and he did not think it was any use taking any further action. The meeting concluded without any resolution being dealt with.