COMPLICATED CASE.

Wairarapa Daily Times, 6 December 1926, Page 5

COMPLICATED CASE.

BANKRUPT IN GAOL. (By Telegraph—Press Association.) NEW PLYMOUTH, Saturday. The arrest of a bank manager at Stratford last year on charges of embezzling ancl his bankruptcy subsequent to his imprisonment were responsible for involved litigation before the Chief Justice in (Ire Supreme Court. The Deputy-Oilieial Assignee asked that a deed of arrangement between William Kerr, now undergoing sentence, and the (Union Bank of Australia and others should be set aside as void under the Bankruptcy Act. After lengthy argument, decision was reserved. Briefly the position was that early in Jinly, 1925, it was discovered that Kerr, then manager of the bank at Stratford, bad been embezzling tbe bank's funds and using them to acquire valuable timber rights on the West Coast of the South Island. J. IT. Robson and T. A. Sullivan had an option over these rights, and H. It. Bionic was induced by Kerr to lend £IOOO to enable a. purchase to be made. Some of the bank’s money was used for the same purpose. On discovery of the irregubities a deed of arrangement was executed on July !> at the instance of the bank, by thb bank, ‘Robson, Sullivan, B'innie, and Kerr. Under the deed it was provided that the timber rights should be transferred to the bank, which was 'empowered to sell them on any terms it though lit and to apply the proceeds, (1) in payment of the costs incurred by the bank over tbe trouble, (2) in payment of the moneys stolen (including other moneys than those used for the purchase of the timber right's), together with interest, (J) a payment to Binnio of £IOOO with interest -ati 10 pc-r cent., (4) in payment of £IOOO to Hobson, (5) in payment of out-of-pocket expenses to Sullivan, (G) any surplus .to be divided between Robson and Binnie.

Shortly afterwards Kerr was arrested on various charges of theft and sent to prison. Oil August 12, 192 d, he was adjudicated a bankrupt, and as a result the Deputy-official Assignee now attacked the deed and asked that it. bo set aside as being a. fraud on Kerr's creditors.