SHANNON CATERER’S BANKRUPTCY.

Shannon News, 14 October 1921, Page 3

SHANNON CATERER’S BANKRUPTCY.

LOSSES ON MANGAHAO CATERING. LARGE SUMS OWING TO BUSINESS ■ ' MEN." ■ V .. ' A meeting of creditors in the estate of Johh Baptiste Shroobant, bankrupt, caterer, of Te Awamutu, and late oi Shannon, was held in Palmerston this week. Mr C. E. Dempsy, Deputy Official Assignee, presided. There were present Messrs. W. H. Gunning; J. Beard (representing Shannon Cooperative Trading Co.), H. R. Farquliar, W. B. O’Callaghaii; (representing Harry Palmer and Co;, and W. Murdoch (representing Chong Pok and Kwong Lee). ’ Bankrupt had entered into an agreement with the Public Works Department, at the Mangahao Hydro-Elec-tric Power Works to cater for the men working at the central camp at Arapeti and at the temporary hush camp. The bankrupt ' undertookX to provide meals at/Such times as were' 1 customary on such works, both in the ; daytime and for men going on shift either day or night,, and to provide all food, provisions and other materials necessary to carry : on the cookhouse in a satisfactory manner. Other clauses in the agreement provided that stores in hand shoujd be regarded as security 4 to the storekeeper and merchant until . sucli time as'they were fully paid for; that in the everit of termination of the agreement they should be taken in whole or in part to meet His creditors; that money sufficient to meet his liabilities should be retained out of the men’s board and used to liquidate his debts; that his charge for board should not exceed 25s per week and casual meals Is 6d each. . In return the officer in charge agreed to assist the caterer by. collecting each man’s board account; to allow -the caterer to sell articles of* clothing, tobacco and small goods (it his own risk, amounts due under this heading to he collected with the board money subject to the purchaser’s consent; to supply firewood; to defray cost of cartage from Shannon to & both camps provided goods were ordered in such manner , as to reduce the cost- to a minimum; and to guarantee, tucker accounts of new men up to £3 per headi The'ar'rangement might be terminatedf by the officer in change only in the case of grosjs failure to meet the requirements or by the caterer under~a* penalty of £10..; in either case the stores to be taken over at invoice prices by the officer jii. charge. . . Bankrupt's' total, dhbts amouuted tp £1362 3s lid, and his assets to ' £IBB 6s illd, leaving a deficiency of £1173 17s Id. The principal unsecured creditors were: Tne Snannon Co-operative Cash Trading Co., £757 9s Id; : J.’Scbvvass (Shannon), butcher, £l2l-10s .2d;' A. ClarK arid Sons (Auckland), merchants,. £214 16s 6d;- J. Roach (Shannon), 'bakef, £7O 17s 6&; W. H. Gunjiing (Shannon), storekeeper, £43..15s 7dr H. Balmer and Co. (Palmerston

North), auctioneers, £56 2s 3d; A. S. ! Paterson and Co. (Weihngtpn), merchants, £23 15s ; A, Slant (Wellington draper, £25 7s 6d; Kwong Lee and Co. (Shannon), fruiterer, £l7 2s; Chong Pok (Shannon), fruiterer, £l2 7s. In a written statement bankrupt stated that he had entered iiho a catering contract with the Public Works ’Department at the hydro-electric works at Mangahao, starting on February 20, 1920, for mree months, with a renewal thereafter if satisfactory on both sides. When he had asked several times for a renewal he was \asked what he could put down as a bond, lie had no money'and he. told | this to Mr Dinnie, who was then m j charge. Mr Dinnie said that under those circumstances the Government word must be as good „as bankrupt’s, 1 and advised him to carry on as in the ' past and everything would he all right. On JuJy 2, 1920, alter'notice had been given to him by his mer- ! chants of the exorbitant rise in the prices of foodstuffs he had gone to the Public Works ' Department offce at Shannon and spoken to Mr Anderson (engineer •in of the works at that time), as he was told by Mr .Dinnie that any arrangement he made with Mr Anderson, would be quite final and in order. He had told Mr Anderson it was quite impossible for him to continue with his contract as he wuuld not have enough money out

ol it to pay the bills, and that it was for Mr Anderson to say whether bankrupt should carry on with the work k or stop. Mr Anderson had told him : to carry oh, and that he would inform the Department of the unforeseen dil-. Acuity and let him know later on as they could not stop the works just W , the sake of the rise in prices of'food for the men working at Mangahao. Bankrupt had carried on, asking time alter time if anything would be done in the matter, and he had never received a decided answer till lie \vas in debt to the extent of about £BOO. He dould not tell the exact figure as the Department deducted the money's due to him from the working men’s wages and paid out the hills as far as the money would go, leaving a bal-

ance every month hue to some of the tradespeople. After Christmas time Mr Dinnie told him that the Department would subscribe 2s 6d per week per a chance. After this had been carried out for three months Mr Dinnie told him that the Department intended running the cook-houses themselves as they would not pay him more than what they could do it for themselves, as goods were now much cheaper to get than what. bankrupt had to pay for them. He was told , this on May 16, and he had to finish upon . May 31, This left him with a debt of about £1000; Mr Dinnie telling him that he must ! pay it as the Department was not responsible in any way. Bankrupt had done all the pioneering for 14 months, starting at new camps, one at a time, under trying conditions and with loss of stores, etc., which had to be kept in damp tents. He also had to pay cooks for only seven or eight men, for which he never received any ' allowance. Now that the whole of the pioneering work was done, together with the reduction in the prices of foodstuffs, he. had been asked to resign, leaving him no chance to pay the debt. Bankrupt attributed his failure to the enormous increase in the cost of stores, and the consequent failure of the Public Works Department to meet him in a reasonable manner over his loss on this account. Throughout the period he had worked long hours, retaining just enough cash to meet the bare necessities required lor his wife : and children. His books would confirm this fact.

Cross-examined, bankrupt said he had £23 when he leH Shannon. He had ten children, four going to school, and five others earning their own living. In May, i 921, the Department owed him £lll4 16s „4d, and he had given orders to Mr Beard (£700), and Mr Schwass (126). The latter was not paid, but the Shannon Meat Co. got a judgment for £l3O which was paid.. He had known when he gave up in June that he was insolvent. The only officers of the Department he had had direct-dealings with were Messrs. Anderson and Dinnie. He had not had any statement of accounts from the Department since July 1, 1920, nor had he received any receipts for payments. He had kept an account for each man, showing how long each man was . with him. This was shown in duplicate, one going to the man and the other to the Department, and he had kept a summary. He had an account, with the Bank of New Zealand at Shannon which was mostly trust money. He, allowed his wife £2 per week; his boys (paid the rent of his house and the stores Went into his general - account. When gopds were at the high price, he was getting 26s per man. Now the Department were getting 28s 6d notwithstanding the reduction in prices.

" It was decided, on the motion of Mr Murdoch, that Messrs. Anderson and Dinnie, and the accountant of the Public Works Department at Shannon be examined after full statements had been produced to the D.O.A.