PREFERENCE ALLEGED

Sun (Auckland), Volume 1, Issue 35, 4 May 1927, Page 9

PREFERENCE ALLEGED

MOTOR FIRM IN TROUBLE HEAVY DEFICIENCIES “This is a most unsatisfactory bankruptcy,’ ’said the official assignee, Mr. G. N. Morris, to-day, at a special meeting of creditors in the bankrupt estate of N. Winger and Co., motor garage proprietors, of Taumarunui. The meeting was called for the purpose of considering the report of the auditors inquiring into the firm’s books. The bankrupt firm began business in 1919 and was fairly successful until 1922, since which date it is estimated the company lost from # £ 700 to £I,OOO a year. The amounts owing to sundry creditors grew from £2,274 at March 31, 1922, to £7,642 at October 31, 1926, an increase of £5,367. During the sane period the amounts owing to the firm grew from £3,313 to £6,485, an increase of £3,172, to which must be added £ 2,498 written off as bad debts during the period, a total increase of £5,670. The report states further that “It would appear that discrimination was not shown when granting credit and that collections were not followed vigorously.” {Summarising a lengthy examination of N. Winger, Mr. Morris said it was clear the bankrupt firm was guilty of heavily over-estimating its assets, which were said to be worth £ 3,000. They might realise £I,OOO. The firm had started trading with ar inadequate capital and consequently was powerless when the serious state of its affairs became known. The injudicious granting of credit and the "cutting” of deposit rates and prices of cars was directly responsible for the predicament Preferential treatment of creditors had been practised and a firm of motor dealers which had treated the bankrupt firm very generously were ignored when payments to creditors were made. Counsel for one of the creditors examined the bankrupt at some length in connection with the preference given to certain traders. Finally it was unanimously agreed that the official assignee be instructed to investigate preference given to certain creditors, and that the case be placed before the Crown Prosecutor with a view to a prosecution.