IRATE CREDITORS.

Dominion, Volume 4, Issue 1076, 15 March 1911, Page 8

IRATE CREDITORS.

AND THE ASSIGNEE. DEBTOR GETS OUT OF THE COUNTRY. HOW CAME IT? SEVERE RESOLUTION TABLED. AND WARM WORDS. The Official Assignee in Bankruptcy (Mr. A. Simpson), came in for a heavy lire of criticism yesterday at a special meeting of creditors in the bankrupt estate of E. W. Jacobs, baker, late of Wellington, and now of parts unknown. There were twelve creditors present, and itr. Simpson presided.

It was originally intended that the proceedings should be private, and our representative who attended for the pitrposo of reporting the meeting was so informed by Mr. Simpson. On the motion of one of the creditors, however, the press-, representatives were subsequently admitted.

The Assignee was then explaining to the creditors what had been done since the first meeting of the creditors. At that meeting, it may be explained, a resolution expressing the desiro of the creditors to have the bankrupt publicly examined was passed. Mr. Simpson, outlining the history of his subsequent action in connection with the case, said that ho had duly reported tho matter to the Crown Prosecutor. Before sending out tho notice, it was necessary, he continued, to get a time fixed by the Court for the examination.

The Law's Delays. After a good deal of delay, duo to the circumstance that the judge was not then in a position to take up the case, thiE was airangeci for by Air. Myers. Tho summons was then issued, but could not be served, as the bankrupt could not bo found. He (Mr. Simpson) then communicated with the police, and was informed, on November 5 last, that Jacobs had left for Sydney about three, months before. That was the first intimation which ho-had received that the man had left his residence, and it was then a question whether tho Crown Prosecutor would agree to havo him brought back. "Wo agreed then," said Air. Simpson, "that it was practically useless to bring him_ back, in view of the fact that in previous cases of absconding bankrupts, where I have suggested taking steps to havo tho in'dividuals concerned brought back, the creditors interested have refused. I would like to have him back myself." The position, so far as the estate was concerned, the Assignee continued, was briefly this: The bankrupt's stock was in a very bad stato; nearly all that had been realised had been absorbed by tho rent, and tho prospective dividend was a mere trifle. The value placed on the stock was £66 Bs. 7d., !and a tonder.of 9s. in the £ had been accepted for tho purchase thereof.. . , A Sore Point. Mr. Robert' Hall raised a note of complaint. It was a sore point with the creditors, he said, that no intimation whatever had reached them from the Assignee's office sinco tho first meeting in August last until February, when ho (tho speaker) had written asking for a statement of-the position. Mr. Simpson: "The file of papers is at alt times open to tho creditors." Mr. Hall: "That.may be." But the position was a very gravo one. Tho bankrupt had commenced business on April 11, 1010, and by July II be had incurred liabilities amounting to £629, of which no less than £-443 was unsecured. The reports which had since been received decided the creditors to ask for a public examination, and to defray any expenses incurred in tho proceedings. The matter was then left in tho hands of the Official Assignee, but nothing further was heard of it until, towards the end of January, some of the creditors asked him (tho speaker) what tho position was. Ho thereupon wrote to the Assignee, asking for a statement of tho position, and was then informed that arrangements for a public examination had been made, but the bankrupt could not be found. The only statement they had over received fropi tho Assignee was to the effect that a dividend of Id. in tho £1 w;as payable to them. They were indignant to think that they had been entirely ignored in this matter.

Whose the Blame? Mr. 'Simpson explained that he was not responsible for the delay—that was the fault of the Court.

Mr. Hall: That does not exonerate you from neglect to inform the creditors of the position. We wanted to make an example of Jacobs, and we thought you were with us.

Mr. Simpson: So I am still.. ' Mr. Hall:' We believer] you would have gone on with the matter. Wo subsequently find that you have been very lax.

"I have not been lax at all," replied Mr. Simpson. '

"Wc think," continued Mr. Hall, "that some intimation, as a more matter of courtesy, might have been given. If the facts had been communicated to the creditors, they would have put their hands in their pockets and contributed a pound or so. (Hear, hear.) They were given no opportunity of knowing where Jacobs was, and notwithstanding the fact that it was known on November 5 that Jacobs had left the country, no information of. the fact was given the creditors till February, practically six months after the first meeting. Notwithstanding your explanaticti," concluded Mr. Hall, "wo think you have been guilty of a grave act of discourtesy to-the creditors."

Mr. Simpson In Defence. ' ; Mr. Simpson pointed out that for the last two years it had been practically a farce to call meetings of creditors after tbo first one. During the initial stages of the proceedings in this particular case, he was away a good deal attending to business, and certain other circumstances arose wliicli prevented him from calling a meeting. If the creditors desired to have a meeting, the matter was entirely in their hands. ■, It was not even necessary to send a full requisition. He had frequently called a meeting on the requisition of one creditor. "I don't care about sticking to the hard and fast rules of the Bankruptcy Act," he said.

Mr. Hall reminded Mr. Simpson of Ill's previous dictum that bankruptcy proceedings would bo carried out according to the- strict letter of the law. When he now said that ho would call a meeting at the instigation of one creditor, he gave them a very great surprise.

Mr. Simpson: I have done so. » "A Piece pf Impertlnonce." Mr. A. Leigh Hunt endorsed Mr. Hall's remarks. If ever there was a case for a Supreme Court inquiry, ho said, this was one. There- was a certain evening when four of the creditors watched the Sydney boat for hours in order to prevent Jacobs leaving. No proper steps were taken by the Assignee, however.

"Proper steps were taken," asserted Mr. Simpson.

Mr. Hunt: Could you not liavo in formed the poiice? I am given to understand that wo could have got an ox. amination of the bankruDt in a week.

"That was a matter for Mr. Myers," i replied Mr. Simpson.

Mr. Hunt: lfc was a matter for you, surely. You sai.l you had agreed tint it was not worth while bringing the ma!i back. I can only say that thai was a piece of impertinence on your part.

The Assignee replied that he couid have brought the man back if ho had had any thought of it. It was not too late to do so yet.

Mr. Hunt: AW had confidence in this office, and left the matter in your hands. "A Very Cravs Charge." Mr. Simpson instanced a case where he had wished to have a certain man brought back, but nothing was done.. That sort of thing was very discouraging to a man in his position.

Mr. Hunt invited the Assignee to picture tho discouragement of tho creditors, and contrasted the "inactivity of this office," with the methods of private assignees. The latter called creditors together whenever anything unusual happened, and issued proper statements of the affairs of the estates investigated by them.

Mr. Simpson remarked that his personal experience had been entirely different from Mr. Hunt's.

Mr. Hunt retorted that ho had to do with a good many of the. private as signoes, and, iir all eases, tho results had been entirely satisfactory. "I say this," he proceeded, "the merchants In this town have absolutely lost confidence in this office. Your own returns show that. Business people are putting their affairs in the hands of private assignees."

'.'You are making a very grave charge against this office," observed Mr. Simpson.

"Well," said Mr. Hunt, "I make it, and I will stand by it."

The Assignee pointed out that all the returns in bankrupt estates were properly made out, properly audited, and available for inspection by creditors. He could not see how Mir. Hunt could bring any charge of mismanagement. Mr. Hunt: "Well, I believe that such is the feeling in this town." '

After further argument, Mr. Hunt remarked that there was no uso in prolonging the discussion. This was not an occasion to mince matters, and ho believed that in saying what he did, ho had expressed tho views of the business community.

Mr. Simpson stressed his previous point that it was a difficult business to pet creditors to attend meetings. Further, he stated, lie had a very small staff of two, and the office had been pressed with work.

An Emphatic Protest. Mr. Hunt reminded tho Assignee of a certain occasion when ho (.tuo Assignee) had refused to witness a proof of debt he had brought in to a meeting of creditors, and in consequenco of that refusal he had had to waste half an hour looking for a justice of the peace. That particular meeting had not even commenced. Was that, ho asked, a reasonable thing to do? The Assignee retorted that he could not have people with proofs of debt interfering with the business of the meeting. Sometimes more than a dozen proofs had been handed in in this way. Continuing, Mr. Hunt, referring to this particular meeting, said that ho had had important information for tho creditors, but in consequenco of the Assignee's attitude towards him occasion, he, in company with Mr. Nation (of Messrs. Levin and Co.), who had received similar treatment fnom tho Assignee, loft tho meeting. The bankrunt in that estate got away. Mr. Simpson asked Mr. Hunt why ho brought up tho matter at this time of day.

"In support of'my general charge," replied Mr. Hunt, who then moved :— "That this meeting of. creditors in the estate of E.' M. Jacobs, pas-try-cook, late.of Hopper Street, city, enters an emphatic protest against tho manner in which the Official Assignee conducted the winding-up of the estate, seeing that tho bankrupt was ordered to appear before the Court for public examination, which courso has not been carried out; nor have tho creditors been notified as to the reason, the only communication having been a notice to the effect that a dividend of Id. ill tho £1 is payable as tho first and final dividend." The motion was seconded by Mr. Skinner (Messrs. Townsend and Paul). I Creditors Too Indulgent.

Another creditor, desiring to refer to the case of a Mr. O'Sullivan, was ruled out of order by the Assignee, who went on to say that the motion could not be put as framed. An examination of the bankrupt had not- "been ordered," ho pointed out. "I think," lie said, "that in this matter you have gone outside the usual channel, and expended a good deal of trouble in putting a slight on myself."

Mr. Hunt, reverting to the first meeting of Jacobs's asked if the police could not have been informed of the ; resolution relating to the public examination. "No," replied Mr. Simpson. "If I had only thought he was going away I could have given thein the hint. They generally keep an eye on a man liko that after a meeting in this office." There was no doubt, he added, that an amendment>of the Bankruptcy Act was required.

Mr. C. M. Banks: Has this point ever been brought before the Justice Department ?

Mr. Simpson: You are asking mo too much. I have attempted to show in my report how bankrupts could bo prevented from getting away. I cannot bring a man back unless I can show that he has £20 of the creditors' money. In this case the creditors gave the man far too m lch credit.

"Not at all," said several voices, in dissent.

If, continued Mr. Simpson, creditors had taken, ordinary precautions they would have protected themselves, and have .been doing something more useful than abusing him. This man bought a business when he had practically nothing.

Tha Motion Carried. Mr. Hunt observed that it was a very simple thing for the Assignee to sit in judgment upon the creditors. If ho wore in their shoes the case would bo different.

"It's a very simple matter for you to sit in judgment upon me," responded Mr. Simpson. Presently the. motion, amended as suggested by the Assignee, was put and carried.

Mr. Simpson reiterated the steps he had taken to conserve the interests of the creditors. "Had I known the man was about to go," he said. "I would have asked Mr. Myers to have taken other proceedings and prevented him."

"You admit then," observed Mr. Bristow, "that you were soft?" Continuing, Mr. Simpson said that with a little delay the man might yet bo brought back. So far as ho knew ho was still in Sydney.

"Ho might be in Timbuctoo," suggested a creditor. Mr. Hall said that it was a fact that the Assignee's work in this particular connection had been futile. While ho was arranging for the public examination, the man was in Sydney.

"I was not aware that ho had gone," protested Mr. Simpson. "Well —vou should have been aware," retorted Mr. Hall.

Mr. Simpson asserted that so far from being lax in such matters, ho had usually been credited as being the reverse. "After what I have said in explanation," lie said, "1 think you ought to withdraw your resolution." Mr. Hunt replied that he had spoken without heat, and with a full sense of

responsibility. He regretted tho necessity for his remarks, which he did not propose to withdraw.

Jacobs to be Found. The meeting then agreed that steps should* be taken to find the bankrupt and_ have him publicly examined. The Assignee was accordingly instructed to write to the creditors on the subject, with the object of obtaining sufficient funds to proceed. The Motion Rescinded. Mr. Simpson again suggested that the resolution be withdrawn. Such a motion covered the whole administration of the estate.

Mr. Hristow accordingly moved that in the light of the Assignee's explanation,, the previous resolution be rescinded.

"I am not going to make a fool of myself," said Sir. Hunt. "Such a motion must ho carried unanimously, I understand, and I will leave the room."

Mr. Simpson said, as Mr.- Hunt took his departure, that it was not necessary to have a unanimous resolution.

The motion was put, and three voted against it. There were six other creditors in the room at the time, and the motion was therefore carried.

As the meeting dispersed, Mir. Simpson expressed his regret that he had not called a meeting after he became aware of the fact that Jacobs had absconded. It was tho first time, in his life that he bad been accused of dilatoriness in his office.