A WEST COAST BANKRUPTCY.

Press, Volume LXVI, Issue 20104, 6 December 1930, Page 24

A WEST COAST BANKRUPTCY.

KARAMEA STOREKEEPERS FAILURE. SLUMP, EARTHQUAKE, FIRE. Allegations that preferential treatment had been given to certain creditors were made at the meeting of the creditors of Malcolm McLean, store-

keeper, of Karamea, West Coast, held in the Chamber of Commerce yesterday. The Deputy-Official Assignee at Westport, Mr W. T. Slee, who presided, announced towards the end of the meeting that he would take legal opinion on the 1 matter. Mr J. 11. Robertson, Official Assignee, Christchurch, attended the meeting, and between twenty and thirty creditors were present, or were represented by counsel. Mr A. C. Cottrcll appeared for bankrupt. Financial Statement. The bankrupt's statement of his financial position was:— Cr.: Stock in trade Taifytown shop, £4O; book debts, £2938 15s 9d, estimated to produce £2000; furniture, £ 150; property, £4140; surplus from securities in hand of secured creditors, £420 12s sd. Dr.: Unsecured creditors, £8096 14s 3d; secured creditors, £1760 7s 7d; estimated value of securities, £2181; surplus to contra £420 12s sd; deficiency, £1346 Is lOd. Secured creditors were: R. Scoltock, Nelson, debt £l5O (estimated value, £600); Commercial Bank of Australia, Westport, amount of debt not given, estimated value of security, £lsßl. The value of bankrupt's real estate (which was earmarked) totalled £4140. Sworn Statement. In his sworn statement bankrupt set out that in partnership w r ith G. Rowley he purchased the business of McCreanor and Co., Karamea, in February, 1921, for £7OOO odd. At the time he had £2500 in cash, and Rowley £ISOO, and a deposit of £3OOO was paid. The years 1921-22 were those of the slump after the war, and butter-fat that was as high as 2s 6d per lb in 1920 was as low as lOd in Karamea in 1922. This, with he fact that they were starting business in a dairying district where the farmers were accustomed to getting anything from £3OOO to £SOOO on credit, soon had the partners doing their best to make ends meet. In 1923 bankrupt bought out Rowley, and carried on, always with the hope that the dairying and timber industries would improve. He also found out that aftei» finding £SOO as deposit for Rowley, the business was very much under-capitalised. Having to find nearly £IOOO per annum for five years meant that his accounts got behind and interest started to accrue, and the loss of discount made' the carrying on of the business a hard struggle. Then came the earthquake and it was difficult to estimate the actual loss to his business that resulted. The depression caused, with the consequent loss of business, still persisted. Floods in the middle of the dairying season caused heavy losses of stock, and the money expected from dairying was much depleted. He was just expecting an exceptionally good year, as the farmers had got their money from the Relief Fund and their farms and houses had been restored when, during his absence, a fire destroyed his. shop and stock. The loss was substantial, as the insurance was inadequate. To his three largest creditors, Messrs A. S. Paterson and Co., Royds Brothers and Kirk, and Bing, Harris, and Co., he gave an assignment of his insurance money. Great exception was taken to this by other creditors, but bankrupt did not, at the time, realise the gravity of the step. At the instance of some of his creditors he called a meeting at which he was asked to file.