IN BANKRUPTCY.

Manawatu Herald, Volume XLVIII, Issue 3729, 13 December 1927, Page 2

IN BANKRUPTCY.

LOCAL CYCLE DEALER William J. Toms, cycle dealer, of Foxton who recently filed a petition in bankruptcy, in his personal statement to the D.0.A., at Palmerston North yesterday, said that in December of 1925 lie decided to start his son-in-law, P. W. Little, in business as a cycle dealer u( Foxton, going into partnership with him. Mr. Charles Sinunonds offered his business for sale at the sum of £240, a proposition recommended by a traveller for a wholesale cycle dealer’s firm. The traveller brought the value, down to £225, and a deal was made. He was informed that there was no opposition, and he put £l5O cash into the business —£105 cash to Simmons, and £45 for new tools. They borrowed £75, and with the remaining £45 was paid out - of the business from time to time. On starting business they, found that there were between 30 and 40 customers only. Shortly after they discovered that there was another cycle business in Foxton doing more business than Simmons did. Three weeks after they commenced another man opened up a shop in opposition. However, after three months, the business was fairly well established, and prospects did riot seem at all unfavourable, arid Toms returned home to Greatford. He was under the impression that Little had sufficient business to carry on, but he was not now confident that he had. Apart from the first three months Toms had been a sleeping partner, and since the commencement had not drawn a. penny interest nor any wages. Ilis only assets, the £l5O, had gone. He had no personal assets except the sum of £5 14s in the bank and the interest (if any) in a second hand Ford car, which the owners held under, a hire-pur-chase agreement.

Percival William Little confirmed the statement made by Toms, and said that they relied mainly on the flaxmills for business. Unfortunately, the mills closed during June. July and August of 1926, and the big flood in October put the mills back. The mills also closed from April to October of this year, and were not yet in full swing. All this affected the business very considerably. He gave too much credit •and it was impossible to get the money when the mills were idle. The other two shops closed recently and with the approach of fine weather, it looked as though the business would become a payable one. He did his best to carry on, but the climax came when a Wanganui firm took legal proceedings to recover £4l. Is fa irness to the other creditors, a meeting of all creditors was called, with the result that they asked the firin to place themselves in the hands of the D.O.A. The cause of,failure was due partly to (he opposition, to the- flaxmills closing down, obtaining credit from numerous merchants instead of one or two, to giving too riiuch credit, and to the lack of his business training, this being bankrupt’s first venture.

The following are the unsecured creditors: Abel Smeeton, Auckland, £1 15s lid, Auto Electric, Palmerston North, £3 12s 6d; Bass Electric, Wellington, £9 14s Id; Bennett, Ltd., Wanganui, £4O 15s lOd; Eric R. Booth, Foxton, £2 4s 3d; British Textiles, Wellington, £1 4s 2d; Cycle and Motor Supplies, Wellington, £7 4s 8d; Foxton Borough Council, £3 16s lid; Hope Gibbons, Ltd., Wellington, £74 4s Id; W. Hamer, Foxton, £1 16s; F. Harris, Foxton, £3 Is 6d; Hazelwood Co., Upper Hutt, 18s 6d; J. Me'Coll, Foxton, 9s; Manawatu Herald, Foxton, £2 8s 6d; Moore and Bergin, Foxton, £5 8s; P. Robert, Pal-

merston North, £2' 12s; Reynolds anl Co., Wellington, £B4 12s lOd; Harold Osborne, Foxton, £5 4s 7d; T eagle Smith and Sons, Wellington, £ll 16s lOd; United Cycle and Motors Trading Co., Wellington, £l. 12s 2d; Watkinson and Osman, Wanganui East, £7 4s 6d; W. Barber, Foxton, £47 19s; Budd and Co., Wellington, £4 16s 6d; Electric Products, Gramophones, Ltd., Auckland, £ll 6s lid; Michelin and Co., Wellington, £lO 3s 3d; H. R. Goodall, Bulls, £2 2s. Total, £348 4s 6d.

The secured creditors are nil. The assets amount to £l3l 9s 6d