BANKRUPT FLAXMILLER.

Manawatu Herald, Volume XL, Issue 1872, 3 September 1918, Page 3

BANKRUPT FLAXMILLER.

PARTNER WHO DISAPPEARED. OFFER MADE TO CREDITORS. The first meeting' of creditors in the bankrupt estate of J. A. Asher (Mr G. M. Newton), flaxmiller, of Tokaann, was to have been held at Auckland last week, but on account of there not being a quorum of proved creditors present no business could be transacted. The official assignee, Mr W. S. Fisher,- read the statement made by bankrupt as to the causes for filing. Bankrupt stated that he commenced flaxmilling operations with a partner, Sidney H. Smalhnan, at Otara, in March, 191(5. The agreement was that each partner should contribute £9OO as capital account. The greater portion of bankrupt's capital was subscribed, but Smallman, pending financial assistance, which did not materialise however, failed to subscribe more than about £BO. At the same time the partners acquired the flaxmilling machinery, valued at £(500, belonging to a native, whom it was proposed to bring in as a third partner. It was agreed that bankrupt and Smalhnan should each contribute £6OO. Bankrupt duly paid his share, but his partner, who was still awaiting financial assistance, subscribed only £BO. The result was that bankrupt had to over-subscribe capital to the extent of about £SOO to keep the partnership afloat. It was ultimately agreed that Smalhnan should forego all interest in the mill purchased from the native on a payment to him of £3OO. The financial position in regard to the Otara mill also became serious. Bankrupt alleged that after repeated demands on Smallman for the payment of capita! the latter disappeared during bankrupt’s absence, leaving the management of the mill in a bad state. Bankrupt gave a detailed account of each mill’s operations. He said that sets-back were experienced on account of weather conditions. The mills were frequently stopped because of labour troubles, and the output was considerably restricted. Later, conditions improved, and bankrupt was aide to pay certain creditors. • A cash store at the Otara mill was of great assistance, and showed a net profit of £1,200 on a turnover of £2,400, covering the period of milling. further examined by the official assignee, bankrupt stated that when he entered (be flaxmilling business he had a cash capital of about £I,OOO. Smallman was an old resident of Tokaann. When the partnership started bankrupt was quite sanguine of success. He could manufacture fibre at about £24 per ton, and the market price at (be time was about £36 per ton. Bankrupt denied that he spent unnecessary time in Auckland, or that be speculated large amounts in horseracing, ■ During flaxmilling operations be never came to Auckland, except on business, but these visits may have coincided with race meetings. It was slated Hint Mr R. Jones, storekeeper at Tokaann, bad a claim totalling £1,900 against the estate. The bankrupt was a brother-in-law of Jones', and it was possible that the latter would not press his claim. Mr' Longnol, representing Messrs Paterson and Company, who, as secured creditors, bold the chief assets, which comprise the two mills, made an offer of £350 to the creditors for any equity in the estate, provided that his firm was given a free band in the disposal of the mill, and conditional also upon Mr Jones withdrawing his claim. It is anticipated (hat the offer of Messrs Paterson will permit a dividend of 6s 8d in the £to be paid. The offer is to be submitted for consideration by the other creditors.