GOING "BROKE"

Rotorua Morning Post, Volume 2, Issue 337, 26 September 1932, Page 2

GOING "BROKE"

ASSlGNEfe EXPLA1NS BUSINESS MEN GIVEN ADDRES3 ON BANKRUPTCY LAW. IMPORTANT CGNSIDERATIONS-. What "t|ie prdinhry fettsiftftss ihan ought to know about bank.-upts and baiikruptcy was explaiiibd to th ) Christchurch Business Men's Club by the Official Assignee, Mr. H. Ribirtson, at the clhb's lunch'son recently. Before any man was adjudged a banlcrupt he must have committed an act of bankruptey, said Mr. Roberts'on. A privati assignment was one of thd most 'commoii of such aets. Another was what was known. as a fraudulent conveyance. This occurred when a man who was in diniculties fbnfied a comMny to take over all his assets; or when a debtor transferred all his assets to one creditor, leaving thc others lahientLig. The word fraudt.1 m.t as used in bankruptey questions was used in a dift'erent sense from the normal one; it simply meant that. it was something which would pre\ent the division. of his assets among all his creditors. _odging one's creditors by keeymg away from one's business-, or by attemp'Ling to leave the towa or country, might also be an act oi' bankrup;cy. Civin.g notice of intention to suspend payment of debts was another such act; and b icause of this anyone calling a meet'ng of his creditors should be very careful of thc way he worded the notice. After an adjudicaLion had been made, the Official Assignee could go back to the first act of bankruptey within three months of the adjudication. For this reason people should be careful in dealing with men who had committed an act of bankruptey. If they paid such a man a debt, and he dissipated the money, the assignee might require the payment again. A man who had committed an act of bankruptey had no power to deal with his own business affairs. "From the commissi'on of an act of bankruptey the bahkl-upt is a fina'ncial leper," quoted Mr. Robertson from a writer on the subjeet. "You deal with him at your own risk. He sliould be kej't in financial quarantini for three months." If the dealings had been in good faith, and there had been no notice of an act of bankfUptcy, however, the man dealing with the banlcrupt was protected. In one or two cases th) dealings of banlcrupt before adjudication could he attaclced. Giving preferenee to one creditor, less than three months before adjudication, was oue of thes \ Knowing eommereial men avoided the appearance of preferenee by pressure; the pressure being frequ mtly more or less of a sham. It was d'fficult to de_ cide what was or was not fraudulent preferenee, and the section was something of a de'ad letter. Tho New Zealand Act said "with a view to giving fraudulent preferenee." Mr. Robertson thought this might be amcnded on the lines of the Australian Act, which stated, "with the effect of giving fraudulent pref irence."