PUZZLED CREDITORS.

Dominion, Volume 2, Issue 557, 12 July 1909, Page 4

PUZZLED CREDITORS.

ESTATE OF J. J. PATTERSON.

SOME POINTED REPORTS.

• A mCoting of creditors in the estate of ,-.. J. J. Patterson, solicitor (concerning which caso other particulars ; have previously ap- .' pcarcd), was held at. the office of tho District Official Assignee, at Dannovirkc, on July '5,, Tho District Official' Assignee's report stated, inter alia: "The bankrupt, encouraged by. the support, of a largo majority ■of , the creditors in his proposal to have a composition accepted, continuously relusod :to ' : supply the information required, and, as tho creditors, aro now aware, the fire.which occurred iii January is stated by tho bankrupt' • to havo destroyed all tho books, except the few handed by him to tho assignee.' The' bankrupt, as the creditors aro aware, car-'■', riod on a largo number of different concerns.' These were: (1) bis business as a-solicitor; ; (2).Wylie and Co.; (3) Koru Sawmilling ... New Plymouth: (4) Ruabine Sawmilling Co.;. (5) P. M. Cohr and Cohr; (6) Anderson, Sons, and Co., Ltd.; (7) Boshcr and Ben- , nott; (8) Einar Endreson and Co. - No books' . at all have been produced, except in' the case of Wylie and'Co:, and the Koru Saw- . milling Co., in which » few have boon pro-;' . duood which are'not'of. material assistance,', and do not disclose .his financial positipn. : The D.O.A. docs not consider it necessary•or % adviEablo in the interests..of the.creditors'. , themselves to mako public the report of Mr.' _ M'Culloch, but he haß supplied a copy of, that report to Messrs.'Loyin and Co. (the largest, creditors in;the estate),' and.'he is'•.'■" prepared tp show the report to any creditor - who desires to see it. Tho D.O.A. has placed this report in tho■ hands of'his solicitors, ■ and thoy have suggested that a small com- ; mittee of tho principal creditors should bo appointed to confer with him as to any matters upon whioh.tbtf'solicitors should bo instructed to take proceedings. ■•, .; ■.•;• ~ ,•■'•■■ A further meeting' of. creditors, was hold '.'...• on July 6, when one of tho creditors ap- '■'.' pealed to tho/District Official, Assignee to igive the some information as td'the ; ( position 'of the securities .held by Mrs. Pat»; ■. ' terson. whereupon Mr. tiurr read the follow? ing loiter from Mr. M'Culloch; tho account-'.-.'-/. ant appointed to make an investigation; into . the condition of the bankrupt's books :-~- Sir,—Herewith I beg to hand you my. r©: . port dealing with that portion of my investigation which is covered by your instructions to examine the books and, documents ■. submitted to mo with a view to elucidating same and ascertaining what evidence there was oiv which to base; action for recovery of: ~ properties transferred by J. J. Patterson, of , moneys paid by. him under such'oircum?:, j. stances -■ as would ■: bring ■ the. ■; transactions' . within the operation of Sections 75 and 76 of tho,Bankruptcy Act;, 1908,; . : : '; . WitH// regard to thp question of recovery, pf'pro- ! pertjes, it seems,to,me.that there is reasonto question the "validity of. some of tho .pro- '.>:.', poi-ty ,transactions'''between' Mr.; ! Patterson';\"' and his wife, and t'liave endeavoured to,;, place the; pviuenoo on : these matters in such' form in,my.report: as to enable your solick tprs tbdecido as/to, what course should be •'; : taken. There are several cases in which I ; " have found payments made' through Mr. J. '. J, Patterson's bank account 'for transactions ■■'•' which the'private ledger shows to have been.,,,;, pn account of Mrs. Patterson, and in regard to "which. I.'have' been unablo 1 to ,find any *'' Iqdgmontsto Mr., Patterson's bank, accounts' as pf, payments made, by; Mrs, Patterson by way of. advancoor refund, of the items rer ferred.to. Possibly an examination of. Mrs. Patterson's banking; account-might clear up ,• some of these transactions, but so far that.haj .'■''.■ not -been available;- During the,course;of ray inquiries it transpired, that, in addition, to being the proprietor of. tho oencem? , known a/» : Wylie, and Company amLtbbKbru Sawmffling. Company, tfio .bankrupt .bad, • ■ within the 'th'rcelyeara previous to hw bank- • ' ruptcy, .been ..■; interested■', as proprietor or partner' ,in. t tlie businesses of the Ruahino Bawraillihg I M. Cohr and Co., .Bosher> and .Belinett, Einar Andersen' anq Company.'; The books of tbesO'concornai'hav* ;'} not been .produced, „and., the, only.; account* v; , ■■} that' I have seen r in' connection' with, their■'";.; are tho-'entries, contained inVMr.' Pattersdn'i ; private 'ledger \. -A 'copy • of : the. 1 bank' pass- ' ■ book of.P.. if. Cohr and.Co., bcr ,30, =1907, ...to' March ,31, 1909,' has; heed obtained from'; the Bank of New Zealand,; butintlio absence of the books 1 br acobunte : or 'the firm tlie .bank' pass-book- does not yield much informatioh.. The results of;my. - investigatibu aro contained ..in. the 54 pages of report, which,l;hand you forthwith; and to which.l.refer >;ou for, details. I have not yet dealt with the question? relating'to the condition of the books. ; I shall deal with .these in a .separate .report.,"' ■'.',. ' The' following 'letter fpom Jlr.-i'M'Culloch was also read;— Following my letter,' of July 5; I havo now to report that I have further, Examined the' books, produced by the bank- ; rupt, : fbr tho purpose of ascorteinirig whb'ther or not .their oondition, is'''such; as .to r sustain 'Kbe charges laid against; thb;bankrupt under the penal clauses of : the Bank- ;'.■< ruptcy Act. I find that tho booka produced S]<, by the bankrupt do not sufficiently pet forti>; ■ his business transactions during tlib throo ' years previous to his bankruptcy,'or disoloso his financial position.""'< I need not. now into details as to'whero the books aro do-..' fioient; but I-would point but tiiat Mr, Pat. ; .. terson has riot;-yet supplied satisfactory \ .;. statements of the' disposal of ,tho . Bumw-; ,■;; thorpe moneys,' or , account with hi». wife, or of his account with Anderson. Sons,; and Co., Limited, or the disposal of the pro- „ coeds of the Euahine mill plant., There are ', many other matters requiring-explanation _• / The : balance-sheet as submitted to tho '■ mocting set out particulars as' follow':— ■ Working account and profit and, less statement of store (Wylie and Co.) for period ; August 21, 1908, and Juno 30, 1009:— ; , I '."■■■, ■Working Account •: To stook on bond Aug. ~. ust, 1908, £616 10s; lid.; purchases to June . ; 30, 1909, -£1968 lis. ;Bd.;i balance ■U,■ ,: profit and lpss account below, £394 17s. 2d.; t0ta1,'£2979 19s. 9d,'By sales,'£23Bo t!. 5d.; stock Juno 30, 1909, £599.175.'4d-j. - total, £2979--19s. 9d.•' -'•;..". v v Profit and Loss Account: To rent, £132; ,' wages, £286 135.; wages for clerical assistance, £28 155.; stable account, £38 6s. lid,; ' lighting, £7 10s. 7d.V;insurances, £14 35., •; 9d.; total, £507 9s. 3d;'' By working aov, . count,-halanoo, £394'175; 2d.; loss, £112 ' 12s. ld.j; total, £507 9s. 3d. (Amounts owing by .Wylie and Co., £402 ', 7k lid;; aniounts owing: to Wylie and',Co:, : ,' £500 10s.'8d.; present value of plant, £113 ■ 155.:',,',' '■' ■'•:/;■ .";,.■ ... '■;■'' •■'.'.■ ■:,-' Liabilities: Merchants' account, £402 7s. , lid.-; balanco, £811' 15s. ld>; .total, £1214 3s. '•■'' v. .'■•- .'/'. .;:.,;'. .'!■" Assets; Goods account, £500 10s. Bd<; stock, £599 17s. 4d.; plaUt, £113 155,; total, ' £121435. ■ ■■" ...:■■ :,■■:■: ~'.',, , ■.'.-■. -';. Tho following resolutions were carried:— ■ (1) To obtain'.'a legal opinion upon tho position, of the securities in thoir relation to tin facts disclosed in Mr. M'Cullooh's. report.''..;■'. (2) That Mr. M'Culloohbo aßked to proparo a statement of alfairp and balance-sheet, as shown by\the books in his possession.' (3). - Thattbe Koru. mill bo sold by tender, ■"'' V