MEETING OF CREDITORS.

King Country Chronicle, Volume III, Issue 149, 22 April 1909, Page 5

MEETING OF CREDITORS.

Mordarat and Bailey.

A meeting of creditors in the bankrupt estate of Henry Mordaunt and Charles Bailey was held on Monday lu( in the Official Assignee's office, Auckland. Mr G. R. Beed appeared for the firm, and Mr Finlay for Mr lfailey personally. Mr A. Manna appeared for the petitioning creditor, and Mr Wynyard for another creditor. Mr Hugh Gerard, who presided, stated

the liabilities to be £2,604 7s 4d, and the Assets were «et down as follow■ Stock in trade, £358; book debts, £139 13sl Id, estimated to produce 1100; furniture £ls; and balaipe of property

above security held by certain creditors, £2.749 7s; total assets £3,213 7s. leaving an apparent surplus of £OOB 17s Sd. The joint statement of the debtor* was read, showing they entered into partnership as builders and timber merchants at Te Kuiti. The timber yard was not successful. They took building contracts and started a joinery factory. They were always short of

capital, but not seriously so until last spring. They had sold the factory, but the purchase was not completed. Their assets were ample to pay all their creditors, but owing to the stringency of the money market they could not be realised in a harry. Tbs sections they had secured had increased in value if they could only be realised.

Mr Reed said as far as he could learn the only chance the creditors had of getting 20s in the £ was by not hurrying the realisation of the assets. He suggested that the creditors might consider the advisability of forming themselves into a limited liability company, and wait until the properties could be realised. He understood the cost per annum, interest on mortgages and rent, totalled £213 15*. and was assured that if the factory and the sections could be It', they would bring in £250. which should pay 'all outgoings. He was speaking entirety without any personal knowledge of the properties. If the sale of the factory had been completed. all the creditors would have been paid in full. Mr Gerard said the valuation put on the properties was £-1.150. Mr Bcvege. representing Te Kuiti creditors said he should consider the properties over valued by about Jt*2OoO. Mr Hanna: 1 may say at once my clients will not wait.

Hrnry Mr>rd»ifhC. being sworn, deposed he had about *£2o capital when he started his first contract at Te Kuiti feor >t«s ago. That was before he joined Mr Bailey. When he entered into partnership with Mr Bailey. there was a proper agreement drawn op. Each provided about £IOO capital. It was agreed that each should draw 3f)s per werk wages. They had always been short of capital, as the business got tco big for them to handle. One creditor began to press them aboot eighteen months ago. The land was atfjuired under lease from the Maori owners. They had an overdraft from the bank on depositing the deeds of the land. At one time the overdraft stood at £I3OO. The limit was fixed at £560 early in 1903. and they were asked to "reduce to that figure. They reduced ft to £93 H before being pressed to reduce to £SOO. Chi April 22nd I9W, they obtained £IOOO on mortgage, giving as security all the land but section S>. Up till then there was no encumbrance on any of the properties. Me gave a mortgage on section 9 on the understanding that it should not be registered. It was. however. registered, and transferred, as he had not paid up in time. Mr Porter said be held a mortgage on section 9 on the understanding there was no other mortgage. Debtor said he wa* not aware at that time the other mortgage had been registered. He subsequently released that mortgage. In the meantime he made arrangements with Mr Porter to get £250 on a first mortgage over section 9.

Mr Gerard: How soon after you got the money from Mr Porter were you aware that th? other mortgage had been registered? Debtor said be couud not from memory give'the actual dates. His partner was fully conversant with these transactions. The first mortgage was paid off by cheque drawn on the bank, the amount being guaranteed by a Mr Gibson, to whom the mortgage was transferred. Mr Hanna said if the first mortgage was paid off then it wat non-existent, and could not be transferred to another person. Debtor explained be had paid Mr Porter £104) of the amount lent.

Mr Hanna asked what security Mr Gibson was to get for the £SOO he paid

Debtor said the mortgage that was transferred from the bank and a second mortgage on the other property. Previous to that Mr Gibson had lent £3OO. The holder* of the first mortgage were paid off. nnd the deed was deposited with the bank. He thought the deed went to Mr Gibson. Mr Porter asked debtor if be bad not given him a first mortgage over section nine.

Debtor said that was so. He was not then aware that the other mortgage was registered. By Mr Gerard: He did say to Mr Porter that there was no mortgage. He did so believing that there was no mortgage until the deed was registered. Continuing, wintess said they practically sold their business last December. He took a deposit of £2O, and handed over possession. The purchasers were to pay £2.100 for section nice, and section eleven, |>lock •aver), with the butUtoga thereon, aompsising sash and door factory, four roomed dwelling boose, stock room and finishing shop. There was also a moulding shed on section nine. The whole Eot was purchased as a going concern, including the machinery. Had the sale been completed, the creditors would have got 20s in the £. The meeting adjourned at 1 p.m. and resumed an hour later. The debtor, under examination, stated further that when the sale "was arranged an inventory was taken of the stock. The 1 agreement provided that in the event of the sale not being completed, the , purchaser was to pay for all material used. T1» items were taken but prices 1 Were not fixed. Tbe ordinary market prkre was agreed upoo as a basis. Tbe t«A jimttwlop on Decern*

. her 18th 1908. On the 26th March, [ 1909, Mr Bailey was informed that the pa re base would not be completed. I Debtor had arranged that his partner was to take possession in the event of the purchase not being completed, and stock being removed. Stock was removed on March 26tb. Daring the four months they were in pos-tession the purchasers kept the factory at work. Mr Cersrti: What became of the product of that work.

Debtor said he was away at Hamilton and coekl not say. The Assignee: You must know surely. Yoa don't mean to say you were not protecting over £2OOO of your creditors' money, when Jensen Brothers had ooty paid you 120. Mordaunt, continuing, said that, altogether. Jensen Brothers paid £7O, in three instalments, and gave a £IOO order. The £IOO was supposed to have | been paid into the bank along with | £4OO by Jensen Brothers, t The Assignee, to both bankrupts: Have you no knowledge of the agree- ! ment which you signed. Mordaunt said that after th.*y retook possession Laurie seised, and the place bad been in possession of the bailiff , ever since. They, the bankrupts, had no claim against Jensen Brothers, except for stock used and probably on the £IOO order. Mr Hanna: There is about £4OOO in hand according to bankrupts* statement. What 1 want to know is what has become of all this money? Would H not have been as well to get a detailed account of what they have done | with the money? They have only been in business 18 months. Neither part- | ner seems to know much about the : matter. Mr Mordaunt refers things i to Mr Bailey, and Mr Bailey to Mr | Mordaunt, and there you are! Mordaunt explained that he had to be several times in Hamilton, and then | he did not know quite what was going on.

Mr Hanna moved that the meeting be adjourned for a week, in order to allow bankrupts to make up their books and show where they stood. Mr G. Bevege, aTe Kuiti creditor, moved, as an amendement, that the meeting be adjourned till Saturday week at Te Kuiti, in order to allow of the books being made up. He represented several Te Kuiti creditors, and they wanted to find out what ths bank manager at Te Awamutu had to say. Mr Hanna said that the petitioning creditors had gone to all the expense of bringing the present proceedings. It would be manifestly unfair to hold the meeting in Te Kuiti.

Considerable discussion ensued, and the mover of the motion withdrew that part of his amendment, relating to the date, the same to be fixed by the assignee.

The amendment was lost, and the motion was then carried.

In answer to the assignee, creditors present said they were not in favour of paying out to the secured creditor, Mr Laurie.

It was decided to adjourn the meeting till Tuesday. May 11. at 2.45 p.m. and that George Nicholas Jensen and Hubert Hine, solicitor, be summoned to appear on that date.