HOTELKEEPER FAILS.

Press, Volume LXVIII, Issue 20490, 8 March 1932, Page 5

HOTELKEEPER FAILS.

MEETING OF CREDITORS. HlfiH RATES OF INTEREST BLAMED. -1 Attributing his failure to the high lutes of interest he was paying on sums borrowed from money-lenders, pricecutting, and loss of trade through reduced public spending power following the 10 per cent, cut, George Arthur Clifton! Whitford, a hotclkeeper, of Lyttelton, met his creditors yesterday morning. The Official Assignee presided. In his sworn statement, bankrupt said that in November, 1920, lie commenced business in Lyttelton as a shipwright. His capital was £4OO, which he borrowed on security of his house. He leased the premises from the Harbour Board and bought the buildings thereon. He carried on successfully j until the Otira Tunnel was opened in 1923, when his business fell off. He increased his pjant until he had about £7OO worth of machinery oil the premises. Early in 1925 he borrowed ;USOO to enable him to finance an overhaul job on a ship. The lender pressed him for payment, and to repay him lie had obtained a guarantee from the bank, under which lie was advanced SuOO, while he borrowed £.200 from a money-lender. He borrowed further amounts from tho same agent until May, 1927, at which time his business premises were destroyed Jby tire and lie lost heavily. All liis books and plant were destroyed. The insurance company paid him between £.700 and .C.SOO, out of which ho repaid the amount owing under the? guarantee. Borrowed to Carry On. After paying business accounts lie had £4OO left. He rebuilt the business premises, and recommenced the business, but as it did not improve lie borrowed money from time to time to enable him to carry on. In May, 1931, lie sold his business to his son, and out of the proceeds' of the sale purebred the Canterbury Hotel, Lyttelton. After entering the hotel business was good up to the time of the reduction of 10 per cent, in wages, when takings began to fall off. Following this, Lyttelton hofelkeepcrs started cutting prices of beer and spirits, and takings fell off dtUl further. Duping the time he was ithe hotel lie endeavoured to repay moneys advanced by the money-lender, and by making these payments he wns unable to keep up his rental payments. Through tho rent falling into arrears tho landlords commenced distraint and he was forced to file. He attributed.his bankruptcy to borrowing money at a high rlitc of interest and loss of trade through the rent falling into arrears cutting. Total debts were shown as £4424 3s 4d and assets as £477 18s lOd, leaving a deficiency of £3940 4s Gd. Unsecured debts totalled £3339 14s Cd jand secured debts £IOB4 8s lOd. Bankrupt's Position. The Official Assignee said that the real position was somewhat different from that disclosed in the bankrupt's statement, which showed a surplus of securities over secured debts of £365. His stock-in-trade had been seized by the bailiff in distress for rent. Although valued at £177 it had realised only £9O at auction. The furniture had not been sold by wish of the holder of a £350 bill of sale. The present licensee would not buy the furniture, from which he did not think the unsecured creditors ■would get anything. Questioned by the Assignee, bankrupt said that he must have been hopelessly insolvent when he sold tho business to his son. He was paying such a high rate of interest to money-lenders that his debts had been growing even while his hotel business was holding its own. A creclitoi; expressed the opinion that bankrupt had no right to take the hotel when he was owing as much money as he did. "He would not have got the goods he did if we had known of his indebtedness." The Assignee: Did you inform the breweries and stores that you owed £2700 to a when you went into the business? —No. Tho Assignee expressed the opinion j that the bankruptcy was a bad one. [ The bankrupt had been carrying a deadweight of debt of something like £7 a week and a capital running into thousands of pounds. The bankruptcy was left in the hands 'of the Official Assignee.