ENGINEERS' BANKRUPTCY

Sun (Auckland), Volume I, Issue 135, 29 August 1927, Page 13

ENGINEERS' BANKRUPTCY

LEASE COMPLICATIONS AFFECTED BY DEPRESSION (From Our Own Correspondent.) HAMILTON, To-day. Negotiations in respect to leases appeared to be primarily responsible for the failure of George Stanley Edlin and Amy Edlin, trading as Edlin’s garage, motor engineers, Hamilton, when they were examined in bankrutpey this morning. Owing to the death of Mr. V. H. Sanson, deputy official assignee, the creditors appointed Mr. Owen chairman. Bankrupt’s schedule showed a debt of £950, owing to secured creditors, while the estimated value of securities was £l,OOl 19s 3d. Total debts amounted to £340 19s 3d, and assets were valued at £289 3s 9d, leaving a deficiency of £sl 15s Gd. Bankrupts began business with a truck and car service garage in 1923. After a hard struggle they were fairly well established and employing two mechanics besides Edlin himself. Early in 1924 negotiations were entered into with the Hamilton Hardware Company to build a garage and lease it to them at a rental of £3 5s weekly. The bankrupts arranged to purchase machinery valued at £3OO on a monthly payment of £lO. The year 1924 showed good business and the turnover was increasing, but the garage proved too small, and another garage was leased, and bankrupt, unthinkingly, signed a lease for seven years at a rental of £3 10s weekly. Work was exceptionally good, but the truck agency proved unprofitable. They lost £l5O, due to a misunderstanding concerning the terms of the lease with the Hamilton Hardware Company. They thought they could cancel the lease at the expiration of 12 months, but were compelled to continue paying rent for an empty garage that cost them approximately £l5O yearly. The balance at the end of March, 1927, showed a very fair profit, but the capital deficiency was increased to £BS. In June this year one of the best customers moved to Auckland, and finding the situation getting worse they filed a petition in bankruptcy. At all times bankrupts had drawn only sufficient for their own immediate needs. They attributed failure to loss on the truck agency, having to pay double rent amounting to £l3O, losses through bad debts and general depression.