©be Sun 42 Wyndham Street, Auckland, N-Z, SATURDAY, JULY 16, 1927. AMENDING THE BANKRUPTCY LAW

Sun (Auckland), Volume 1, Issue 98, 16 July 1927, Page 8

©be Sun 42 Wyndham Street, Auckland, N-Z, SATURDAY, JULY 16, 1927. AMENDING THE BANKRUPTCY LAW

SOME amendments to the Bankruptcy Act, which were introduced to the House of Representatives this week, need to be surveyed with a cautious eye. They aim at the extension in several directions of the powers of the Official Assignee.

Providing that he is authorised by the creditors, it is suggested that the Official Assignee shall have the right to sell any part of a bankrupt’s property by private contract, including goodwill and book debts. This may suit impatient creditors. hungering for some return and not very particular as to its proportions as long as it is quickly yielded. But what of the rights of the bankrupt ? Is he to be sold up. offhand, to the nearest buyer, when there is a possibility of a properlyadvertised sale by auction or tender yielding sufficient to pay his debts and still leave something over for the debtor? Sale by private contract, without the protection of publicity, may afford opportunities for doubtful practices on the part of sharp persons. The Official Assignee will need to be particularly watchful that he is not persuaded in hi* innocence to exercise such a power to the detriment of the bankrupt. By another clause, it is proposed to make unlawful the publishing of a report of a bankrupt’s examination concerning his property, save with the special consent of the Court. llow is this going to affect the trader? Has not the public- the right to know in what manner bankrupts have conducted their businesses and what they have done regarding the property on the security of which, it is to be presumed, they have obtained their credit?

There are numbers of people who would be unscrupulous enough to play peculiar pranks with goods obtained on credit and to “juggle” their own property so as to defraud their creditors, if they could do so without fear of publicity. It is this publicity in the reporting of creditors’ meetings, which is at once the protection of the trader and the check on the unscrupulous debtor. Take away that publicity, and the number of bankruptcies will increase—with a most serious effect on trade.

Those are the two main features in the proposed Amending Bill. Both will need the very earnest scrutiny of Parliament before tliev are made law.