"CASE OF HARD LUCK"

Evening Post, Volume CXIV, Issue 123, 21 November 1932, Page 11

"CASE OF HARD LUCK"

HOTEL-KEEPERS' FAILURE \

MEETING OF CREDITORS

The acute economic depression, auj the fact that the lessors consistently, refused to make any reduction in the rent, were the factors to which William Dean Smith and Walter EutSerford Flintoff, formerly lessees of the Arcadia Private Hotel, attributed their filing a petition in bankruptcy. Therpartnera attended a meeting of their.creditors ia the office of the Official Assignee (Mr. S. Tansley) this morning. The statement of accounts" showed that the amount owing to ■"■ unsecured creditors was £992 10s 6d. The assets were set down.as £25, leaving a defir ciency of £.967 10s 6d. "' < ". The principal creditors were:—J. F. Turnbull, £182 Is 3d; Wellington City, Council (balance outstanding on rates), £263 6s 4d;. H. Jervis and Sons, £445 12s 2d; Cresswell and Sons, Ltd., £€3 5s lOd; Evans and Harrison; £60; N.Z, State Coal Co., £43 3s 9d.

In their sworn statement the tank* rupts stated that in November, 1927, they purchased : the goodwill of " tha lease and' business :,. of .the - Arcadia Private Hotel .and the furliiture. for £7500, On taking possession they paid £1000 in cash, and six-month's later/ £500. They executed'a'inortgage 'on , the lease and>an. instrumentby way of security -over the furniture in favour of the outgoing .tenant, Mrs.. Tiller, to secure the sum of £6500. That sum was reducible at the rate ofV £20 a week> and bore 7 per cent, interest. While the business was being carried on they paid Mrs. Tiller, for principal £6190, and for interest £1211 lli* * total of £740111s .od, In-August, 1931, the payments on account of puncipal were reduced to £15 a week, and these.payments were regularly made until September, 1932. The rent reserved by the lease was £30 a week, and they had to pay rates, and insurance, premiums, and.for,all repairs.- la 1930 -the takings began to. fall ofE seriously, and between April a?3l and Juno 1932 they made frequent applicationi for a reduction in rent, But such applica* tions were always -refused;:; In; June, 1932 an agreement was entered into' whereby, they agreed to continue to paj; the same rent as previously condition* ally on Mrs. TiUerfeducragtHe'payments of principal to -.£lO :a weekani the rate of interest to £5.125;. and conditionally on the landlords giving them an .option for.an extension pi tho'jease for a further, term.--of one" year lit a rental to be agreed upon.' ";■ " v ■ In 1931 and 1932; drastic'■ ecpKoniies were. made by reducing. wage?; 'and overhead Expenses, butthe takliisk continued to fall sq'rapidly, that- iKeyAwere unable to carry out. the1 agreemenjt; ani; on 19th September this\year Mrs, 'Til.ler resumed pbssossion of the hotel and thefurniture. The lessors had hot accepted a.surrender".of:thelease. The"average weekly takings during.the peripd-they were inoccupation of the-hotel were as follows:r^l92B-29, £.192: 1929-30, £193 10s; 1930-31, £177; V 931-321, £127; 1932, five-ancl a half. months to"l'9tl» September, £98, ,\;: ■ . '-.': v ';;'i Mr. B. L. MeAlister, who represented the landlords and Mrs. Tiller, saidrihat the landlords were not in a positip'n'to reduce the rent. Mrs. Tiiler__waa quite prepared to'accept tn'e furniture in satisfaction' of her debt.:-' '" ':.■■■}": DID THEmitJTSibsTv ' Mr; W. ; jerry, vW,ho;-represented 'tha bankrupts, said-that the two men had conducted the hotel weir and gave satisfaction to the travelling public, and,-f or a- long time satisfaction .to their credi-' tors, but, the takings: dropped- so. much' that it became impossible f6r.-thenvto icarry on. After the agreement entered into in. June things became^worse. He - thought everybody would admit that the bankrupts had done tueir 'utmost ' to make things meet.- During the first year or two they, paid their way and did reasonably well, and if normal' conditions had continued'tie hotel Would be flourishing to-day; ,'_. :; : ■: V,._" The Official Assignee- sa.id .that .sher» had been,no suggestion of dishonesty, but he thought the bankrupts jnight: have called their, creditors ..together - when they.were slipping. ■.' ■■.:. .- Mr. .Perry.said.that what made them carry on was the agreement maclfi in June. They thought things might'improve, and so enable thenv to satisfy their creditors* . : .•■■■•,■'• >■•' : -■_>-

The Official Assignee said: he^nai-re-ceived a letter from one of the-- creditors, -who .stated: that the-bankrupts had had.bad luck and he-.waspreparecl to facilitate their.discharge.-. :- si • • Mr.. McAlister said he realised' it was a case of hard luck and- would not oppose their discharge.. ■-.-. .:.:,- No motion, was carried, and after further discussion < the•- meeting-- was adjouimed sine die.- ■-.-. '