ACTED IN GOOD FAITH

Sun (Auckland), Volume II, Issue 473, 1 October 1928, Page 12

ACTED IN GOOD FAITH

BANKRUPT’S DEBTS FATHER-IN-LAW’S OFFER When he was aware that he was insolvent, David John Elston, a storekeeper, of Waiau Pa, incurred further debts. He admitted this when he met his creditors this morning, but declared he had acted in good faith. “I did not realise that I was committing a grave offence in not letting: creditors know that I was insolvent." Elston said in his statement. Bankrupt’s act caused the official assignee. Mr. G. X. Morris, to point out that three or four large creditors had been prejudiced. Elston knew by a balance taken in June this year that he was insolvent, but had carircd on ' until he sold out in August. Mr. Findlay, who represented Mr- ! Richardson, the father-in-law of the bankrupt, remarked that he would not , mind defending Elston. “He’s been , | very frank,” was Mr. Findlay’s opin-j ion. After considerable discussion, the ' creditors decided to accept the father-in-law’s offer to forego his dividend on the first £2OO owing. The father-in-law’s claim will also be reduced. Elston’s debts, all unsecured, were , £945, his assets, £520, and the deficiency was £4l9v He started business in 1926 without experience, but found immediate trouble with a quantity of unsaleable stock. He had bor- ■ rowed when he started, and found that the returns from the business were not up to expectations. In March, 1927, a fresh set of books was made out. He was solvent then. A period of slack trade and medical expense put him behind, and. in June, 1925, a balance sheet showed that he was in- j solvent. He carried on and sold out in August. Bankrupt said that he had been as careful as possible. He had prospects of a position, and would do all he could to pay. t Questioned by Mr. Morris, bankrupt ■ said he had not deliberately held back < the information that he was insolvent j when he contracted his late accounts. I i