IN BANKRUPTCY.

Stratford Evening Post, Volume XXXV, Issue 44, 20 February 1913, Page 3

IN BANKRUPTCY.

RE DERBY BROS. Tho first meeting in the estate of Derby Bros., sawmillers, was held in the office of Mr A. Coleman (D-O-A.) yesterday afternoon, when there were present Messrs J. McCluggage, Morrison, J. Hodge, A. G. Mcßeth, P. Thompson (representing Messrs Bumsden, Marm, Todd, Carten, and Buckley), Blair, Abrahams and Reira (representing Newton King), Olridge, Harkness, Stanford, Bain, Fincham, J. Sharrock, Schofield, H. Brown, Aagaard, Boon and Masters. The bank, rupts (George Henry Derby and William Derby, represented also by Mi W. G. Malone) were also present. The D.O.A. presided. In their declaration, the bankrupts stated that they had™ carried on the business of sawmillers at Stratford and tho surrounding districts under the stylo of “'Derby Bros.” for the past ten years; that prior to March, 1911, they owed certain sums of money but were quite financial; on the sth March their sash and door factory at Stratford was burned down, and all the stock, machinery, and plant therein were destroyed total value of the building, machinery, and stock destroyed by tho fire was about £3OOO, and the fire insurance only £6OO, the loss being estimated at £2100; in consequence of tho loss they were unable to meet their obligations; at a meeting of creditors on 20th April in Stratford they offered to pay in full all wages earned during the preceding four months up to a maximum of £SO, and to pay 7s 6d in the £ on the balance, wages, and all other claims, such payments to be made on 20th October, 1911, this offer being accepted by most of the creditors; owing to tho wet seasons they had been unable to make the payments, but had been hoping to retrieve their position, and they had been trying to do so; some of the creditors had been pressing for payment, and they had been compelled to file tho petition; they believed that their present position was brought about by the fire as stated above.

The statement of the bankrupts’ position showed: Unsecured creditors, £2594 15s Id'; secured creditor, £2347 16s 9d; less estimate value of securities £2000; deficiency on security, £347 16s 9d; stock in trade, nil; book debts £371 7s 4d estimated to produce £150; cash in hand, £6; furniture, nil; property, nil; surplus from securities in hands of secured creditors, nil; total assets £56. The secured creditor was Joseph McCluggage, land agent, Stratford, estimated value of security, £2000; amount of debt, £2347 16s 9d. Unsecured creditors were as follows : —Wages Men : Perrin, C.T., £4l 14s 8d; Thompson, J. H., £22 11s 6d; Aberhart, A. E., £4 6s 2d; Mcßeth, C.,'£26 17s 7d; Coley, C., £7 7s sd; Fatham, T., £9 17s Id; Maru, A., £SO 3s Od; Buckley, W. H., £3l 8s 2d; Carter, O. 8., £56 17s 6d ; Todd, Geo., £169 16s lOd; Kafsky, C., £l2 Is 3d; Lumsden, G. W., £27 18s sd; McCook, R., £6l 12s 6d ; Fincham, E. H., £52 10s; Wright, G., £4 2s Od; Staples, G., £7 15s 2d; Derby, J., £25 7s; Mcßeth, A., £l4. Ordinary Creditors: —King, Newton, £415 19s lOd; Anderson, R. 8., £5 12s 8d; Burgess, 8., £2 12s 4d; Aagaard. M. C., £l3 5s Id; Bellringer Bros., £lO 16s 4d; Dwyer and Lennon, 8s Id ; Hackett, 8., £1 11s 6d; Handley, R., £1 8s lid; Murray, J. 8., £2 0s Id; Pollock’s Estate, £l2 17s 8d; Sheehan, J. E., 9s 8d; Smith, G., £2 2s 9d; Mcßain and Childs, 15s lOd; Thompson, J. A., £9 2s; Smart Bros., £l9 16s 2d; Wilson, Drake and Co., £SO Is ; Pitt Bros., £45 14s od; Re veil, 'L (estate) £146 8s Id; Stratford Printing Co., £25 12s 7d; Cameron and Brooking, £35 9s 4d; Boon, J. W., £ll3 19s 8d; Murray and Co. (David), £271 0s 2d; McFarland Co., I)., Ltd., £3 16s 7d; Smith and Smith, Ltd., £lO 3s 10(1; Blundell Bros., Ltd., 4s 6d; McLean, Archibald, £2 8s 5d ; Noes, Win,, £1 ■3s 7d; Vacuum Oil Co., £7 19s 7d; King Gold Mining Co.,' Ltd., £l2 0s 8d: United Asbestos Agency, Ltd., £1 10s Id; Harris and Bastin, Ltd.,

£l4 17s 3d; Beus, H. Jj., rus 3d; Hopkins, H. J., £2 12s 6d; Boon Bros., £53 2s lOd; N. P. Sash and Door Co., 10s; Quin Bros., £6l ss; Syme, Geo., Bain, Jas., £306 ss; Ferguson, A., £49; Paget, T. L., £lO 6s 6d; Were, W. H., £29 15s; Blair, Walter £72 0s 3d; Ferguson, J. K. (estate), £5; Pukuweka Sawmills, Ltd.,-, £l7; McGregor, Ewen, £3O; Leydon, J., £ll 17s; Davey, A. J., 15s; Mason, Yet.,

£1 ss; Stewart and Co., Ltd., Wellington, £l7 0s lid; Burns and Co., John, Auckland, £4 12s; Mcßain and

Childs, £l4 13s; Spence and Stanford, £2 11s 6d; Stohr, E. 8., £1 2s; Morrison, Geo., £lO 4s 9d; Masters and Sons., J., £lO 13s 2d; Masters, H., 7s 6d; Harkness, B. J. Total £2594 15s.

The D.O.A. said that there was nothing to be expected from the estate, for the secured creditors and it was quite posisble there would

be a deficiency shown of betweer

£3OO and £-100 for the secured creditor. The book debts, amounting to £371 7s 4d, were estimated to produce £l5O, but he did not think they would produce even that. He had sent out demands for accounts owing, but had received several denials of liability, contra accounts being produced. The County Council and the Borough Council were set down as owing the estate £55, but there was over that amount owing in unpaid rates. Then in other cases where accounts had been sent out, receipts for the amount were produced. There would be nothing for the unsecured creditors. As to the deed of composition, it was not worth the paper it was written on. It had not been executed. George Derby had signed it, but his brother had not, and all the creditors had not signed it. The position now was worse by

from £6OO to £7OO than at the time of the composition. George Derby, sworn, said in reply to the D.0.A.: I consider that before the fire wo were financial, 1 never had any balance sheet made out. The bank overdraft was usually about £SOO. We tried to sell the factory before the fire. The insurances were kept low on account of the high rates. After the fire, a meeting of creditors was held in the Borough Council Chamuers. I had, up to then, made no offer to my creditors. About half an hour before the meeting my brother and I went to Mr J. McCluggage, and told him what was happening. 1 We arranged that he should guarantee our bank account for £2OOO, and take over all our securities, and'he consented. We then went to the meeting and made tne offer contained in the deed of composition. 1 told the meeting that a frieAd was helping me, and he would want a mortgage over all my assets. I did not tell 1 the creditors the details 1 of all my 'assets and securities. Mr' McCluggage then guaranteed u» fbr -£2OOO at' the National Bank. Part of the £2OOO was paid to the first mortgage all my securities, about £800; five hundred was paid to the Bank, wiping out the overdraft; five hundred and thirty was paid to the wages men (six hnd eight in the £) khd' 1 Creditors (2s 6d in the £. ''The balance went in purchase of b'ullqcks and plant, and ro run the mill. The further sum of £3OO was advanced to mo by Mr McCluggage to pay wages. This was about two months after the first advance of £2OOO.

At this stage, Mr McCluggage explained that he had an engagement, and if any of the creditors wanted any explanation on matters concerning his connection with the bankruptcy, he would be glad if they would put their questions then. It would be better than talking on the street.

By the D.0.A.: I paid W. Sharrocks’ second dividend of 2s 6d in the £ (some £3O odd) some time last spi’ing. I was to re-imburse myself out of the book debts. 1 did not pay Mr Sharrock any further dividend. By A. Mcßeth: I took the mill over on the 6th November, but timber had been cut previously, and I railed it away on consignment, and I have been credited or paid the proceeds. I took possession under my mortgage and bill of sale. My bill of sale gave me security over all property in or about /the premises. I have to deduct from the amount of my debt of £234.7 16s 9d the proceeds of the two trucks of timber sold, but I have to add Mr Sharrock’s second dividend of 2s 6d in the £ on to that claim of £2347 16s 9d. I sold all the secondclass timber, about 19,000 feet at 10s a hundred, but it would net only about Bs. This was from the Stratford .yards. The expenses have to be deducted from this. There were no stocks of timber at any of the country mills. The bankrupt stated that there was about 11,000 feet at the Stratford yards when Mr McCluggage took it

over. j Mr Derby’s examination being continued, he said: Quin Bros., Havvera, were paid 2s Gd in the £ as usual, j and I also agreed to supply them with timber at 9d per 100 feet less than the standard rate. I did not supply Masters and Sous directly or indirectly with timber, or any one through them. 1 paid Mr Boon 2s 6d dividend like the others, and 1 also supplied him with timber to the value of £2 12s. I made no arrangement at the time that it was to bo set off against the old debt, but he did so. I sold most of our timber during the last two years to Boon Bros., and latterly to Quinn Bros. The former set off nothing against their old debt, nor did the latter until the last truck load. I started again after the fire in January, 1912. Owing to bad wcather and roads we got further behind. I honestly thought wo could pay our way and get out of debt, but the bad weather prevented us. 1 knew that we were insolvent at the time of the fire, and hoped to pull up the deficiencies. The whole of the proceeds of the farm, sold to Fincham,

I were retained by the mortgagee, T. S. Weston, leaving the mortgage debt then about £I4OO. Mr McCluggage had endorsed two of my p.n.’s payable to W. Sharrock for his second and third instalments of 2s 6d each. These p.n.’s were given at the dates that the ordinary instalments should have been paid. My brother, 'William Derby, took no part in the financial management of the partnership. Mr McCluggage guaranteed my account for £2OOO. He did not guarantee that my dividends of 7s 6d were to be paid. In reply to a creditor the D.O.A explained that Mr McCluggage had a perfect right under his mortgage, after foreclosing, to take over the properties and work the mill as he wished, but if he wanted to become the owner he would have to put the matter through the Court, which would cause him some expense. Mr McCluggage wanted the creditors to allow Derby Bros, to transfer the estate directly, thus saving expense. If the creditors thought the valuation was too low they could pay Mr McCluggage the £2OOO, which he offered to take for his rights, and take them over.

Bankrupts hrfd no offer to make, nor any suggestions to put forward. It was resolved, on the motion of Messrs Sole and Finchara, that the meeting be adjourned to enable the D.O.A. to compile a schedule of Mr McCluggage’s securities to submit to a future meeting.