BANKRUPT BUILDER

Evening Post, Issue 51, 2 March 1931, Page 11

BANKRUPT BUILDER

LACK OF CAPITAL

' ''TRADING SHORT OF* CASH" "Ono hundred per cent. optimist, seeing millions of feet of timber coming in when there weren't thousands," was the description of Erie Albert Algar, builder, of Wellington, as given • by Mr. K. S. Moss, one of his ' secured creditors at a meeting of AJgar's creditors before the Ofticial Assignee (Mr. S. Tansley) this morning.l "He's been trading short of cash all the time and we are all more or less to blame in giving him credit/" continued Mr. Moss, who moved that Algar's discharge be opposed until he pays 2s 6d in the £. This motion was seconded by Mr. 11. L. Green and carried. Mr. It. I. Hawkins appeared for tho bankrupt, whose sworn statement showed that he had comirienced business as a joinery manufacturer with a capital of £150 in 1913. He carried on successfully until 1920, when he sold his business and* plant. He .ceased operations until about 18 months later, when he commenced business as a builder and carried on until the end of, 1925. In the early part of 1920 he purchased 2t acres with a large building at Miramar. ,He converted tho building and put in a largo plant for the purpose of carrying on the business of timber merchant and also building on sections which he had already purchased. He nlso purchased lorries neeossary for the timber trade. He purchased large stocks'of timber and carried on until early in 1927, when he found that he was being pressed on account of ' having insufficient capital. PURCHASE OP A MILL. "I called a meeting of creditors, the amount then owing to the unsecured being in the vicinity of £10,000," continued Algar in his statement. "I sold certain assets and stocks and paid 10s in the £■ almost immediately, and carried on my business, paying the remaining 10s by the end of 1928. ]n addition to the sum of £10,000 there was an amount of £4500 owing to another creditor who had advanced tho money to pay for stock. Early in 1929 I purchased a sawmill in the Pelorus Sounds for £3750, plus £200 for cutting rights.' These two amounts wero satisfied by the vendors' taking a mortgage!" over my'laud "and buildings at Miramar. Before going over to inspect the bush and plant in Pelorus Sound one of the vendors told me there was approximately 350,000 feet of tim--ber in the bush they were cutting still to be cut. After making a rough in-1 spoetion of the different portions of i bush I was informed that there would I probably be only 150,000 to 200,000 | feet. I was also informed that the ' mill would cut about 25,000 feet per i week. I took over the mill and com-1 menced cutting operations thero on 11th February, 1929. After cutting for 2$ ■ months the bush was cut out and had | yielded only between dO,OOO and 50,000 feet. I removed the tramway to the adjoining land, where I had cutting rights, at considerable expense, and cut from. that, part, over a period of about six months, about 120,000 foet. The value of tho cut sent over to .Wellington was considerably Jess than the cost of getting it out.' In the latter end of 1929 I was being pressed by creditors and had to sacrifice a considerable amount of stock., Early in 1930 I f was compelled to close down both mills through tack of further capital to carry on with. Between April and November, 1930, I earned by way of commission about £375, the. bulk of which went to pay the most pressing claims. During the months referred to I endeavoured to re-finance and get the mills working again, but was unable to do, so on account of the depression. Since then certain assets have been sold by tho mortgagees, including a halfsharo in a block of 30 acres at Miramar and the mill and plant at Miramar. "I can only attribute my present position partly to the loss incurred through the purchase of the mill in tho Pelorus Sounds, which did not at any time produce enough to pay its way, and partly to insufficient capital, which has caused me to aacrifico stocks of timbw at various times." Of the 52 creditors the following were securod:—James Croighton, £56jl 3s; Wellington IJrust, Loan, Investment Co., Ltd., £1400; Miss Aubrey, £1000: P. J. Bydder, £700; E. S. Moss, £330; Field, Luckie, and Wiren, £100; Loan Security and Discount Co., £140 17s; Mr. Teagle, £100; P. J. Pinny and Co., £253 ss. The principal unsecured creditors were:—J. P. Payton, £335; Izard, Weston, Stevenson, and Castle, £263; J. E. Williams, £211; A. H. Turnbull and Co., £156; N. F. Aberhart, £130. ' The-total due to unsecured creditors was shown as £2690 10s Bd, and to socured creditors £9675 ss, less the estimated value of the securities (£6995) —£2680 ss—the total debts being £5370 15s Bd. The assets were sot out as book debts £106 and property £490, a total of £596, leaving a deficiency of £4774 15s Bd. Under examination, the bankrupt admitted that the principal book debts hnd been owing for two years or oighteen months. The "property" consisted of ySOO fully paid up £1 shares in Rod's patent loud-speaker, £200 held in trust, nii^«> steam boiler, £40. Mr. Tansley: "I think the assets are nil except the boiler." Mr. C. J. O'Regan, for Mr. A. Geofrey, said that previous to Algar taking it over his client had run tho Pelorus Sound mill at a good profit for six months. Algar had not been misled over the purchase of the mill. His troublo had been lack of capital. The motion having been enrried, the Official Assigneo adjourned the meeting sine die.