A SAWMILLING FAILURE.

Taranaki Daily News, Volume LV, Issue 234, 21 February 1913, Page 6

A SAWMILLING FAILURE.

TKX VKAIts- )!.\1!1) TOIL '■'i'i: \MTju.\r;. (I ' V " ,I; ( ' M| - licporu-r). Ai Nli.-.iior,! on WV.fm-sihiv tlu-n- was i'l"' 1 "' » I'i.ir must,.,- „f creditors i„ |].e .-sj«l«. ot U,.rl, y 1!,,,-.. (lf strai.onl. saw;»"»'ts. who had lib,! a , M!t i lion in bil „ k . '•."l'lf.v. Mr. A. Coleman. D.O.A presided, and conducted tin- business of the rather ditlicult meeting very clearly. .Mr. W. <!. Malone appeared fo'r (ho ,'„„. S( ,' ••"'■'■•l c-ri-ditor. and Mr. 1". Thompson for several unsecured creditors. The position of the estate ivns briefly: I nsecurcd creditors. r.2:>04 1.1., i,|. secured creditor, £2:147 ]li s !)d (less estimalcil value of securities, £2000). Assets: nil; book del)ts. W7l 7s 4d. eslimated to produce £1511; cush in hand. Cii: total. LloO; deiiciencv' C27SS lis ll)d. The bankrupts Ku-or-e ilenrv and William Derby) submitted a statement that they had been in the sawinilliiio business in Stratford for about ten years. In March, till], they owed certain sums of money, but were quite financial. On March ."). Kill, the sash and door factory at Stratftml was burned down, ami ail tuo machinery and plant was destroyed. The total value of the building., machinery and stock destroyed was £3OOO. and the loss was estimated at £2400. J. n consequence, they were unable to meet their obligations, and held a meeting of creditors in Stratford on April 20. foil, and offered to pay in full all wages earned during' the preceding four months up to a maximum of £SO, and pay 7s Gd in the £ on the balance of wages and all other claims. This offer was accepted liy most of the ereditors. Owing to the wet season they had been unable to wake the payments agreed upon, but had hoped and tried to retrieve their position. Some of the ereditors had recently pressed them. Their present position was brought about by the loss sustained in the fire on March •">. 1011.

The only secured creditor was Mr. Jos. McC'li.iggage, whose claim was £2347 l(!s Oil. and the estimated value of the security £2011(1. Mr. McChiggaue. questioned, said £2OOO was about the top value. He Would sell the security for less than that.' .■'....;■

Tliif n.O.A. siii.l Hip book debts would prpbaWy realise far short of .the..estimate.' Tlie bankrupts at the time of. the composition two years a?o owed .£4OOO. Now they'awed :£4!)7.L'. Bat. the £4OOO was reduced .by .the .payment: of t'IJOO insurance to the mortgagee. So the bankrupts were really ■ .tliOO worse, cli now than then. . There had been jio appointed to .see that the ba-nk-, repts • carried ,out .their undertaking, toi , the creditors.- It .was, apparently, nrif body's, business, and .no.one bin] seen, .to it. Only thp finst.dividend .of 2s; (id in I the £ had been paid out. .- ,vl Keo'ge Derby. <Mi».uif_iluj..Lankauipts, i said tjhat before the fire he was fnian- j eial. Ar believed- he-.was ; *0.., . ; ITe T .was j improving hi~ "position" TTe had'! never (had a ba)ance-.sl>eet_j>rc_parcd. but ] had ajsked his accountani for one.""" Of four.-<j lie had .had, anxiety, seeing, he bid njork.-d all fho=e v-- nii.jiiid got no-' •,thang,j They; had,,m,ct, iv,ijb .maujy,, mi<f • fortliijcs in brines.-,. ..Thi-y tried ;li>;S.«»j| the fae | tb.i^buf : !Vot'ihV,s,'i\vnii!ls. The: ;i()si'n-aiif : e was ke'pt'dowii'to k(jW l)(!wu|e it' seemed thai; ;Vt the/rales' <<-.lia.i-jf<|d' fliey wereeverlasfiiiyjy' wording,' .for, tl e co.mpanie-. .Tlie ; 'nre" nroirgbf; abput the' rpmjjosit ion. wit'li' the. 'credit'-' 1 oi'fj. . j No" offer. Ita(t, br;en'\n'ia'(/c't'o'tluv creditors pripr. to 'inceting'.tjieni.. 'Jii.it.prior :to the meeting, arid' previous;'t'b' .seeing Mr. McChiggage'. "he' had ''Triorthpugj'! he could make an oll'er ;i,t ajf";' •Flist before Ihe .meeting/lnya.ijd' his' brn-' they went to see. Mr. Jigreed" to guarantee, the'firm's' bank/ac--' .count to £2OOO. taking/a^'moriagage 1 ov-jii'iall securities, which were flc'sc.i;iKcVr ai,'lli<j time.' .At the meeting df'credit-'' ors hd made jui 'offer (if .7s fief iii',th'e ! Z'A "throughthe assistance of 'a .friend." gave jilts' 'creditors 'to understand that' be.Jmjl pledged, all li'ik"assets ; lh order lo'j pbtaii this'assistance. 'Tie dfd'n'ot ! eiVw-' .nievatfe the securities at the ti^nc'.' AKbut" -tlSOOjof the'.£2ooo liseYl'ln payijiC Off Mr. w!io; was''first' mpvtgfig'ee ovei' a,nd idriifH some- went to- pay, the ; 'clividen( l l : ,pf : 2,j(ii! in the, C and lU'' : S(l'.iii"\V.'-'C t,o|'Hi(f wages f men 'as prefeVelitial' (Ti'dif-'( ,ors, ijbsdrhirig £;"isn,' 'Atl' pages'' me'ir and preferential claims 'fecVlVed -(is 8d "in'' :. 4 : . : Mr.| Thoiii]ison said, tliat some o'f the I wage-] men received on!v 2-- ; lic'i "in -flic | ■c* ,! ' " '\

.Bjii krupt. continuing, said thai with .1],.,.; h ilanic lie bought bullocks and rah .iii- ; ii,ii:. lie borrowed another .C'iOO or fill from Mr. Mcf'lugg.ige to assist him ii running tin? irrrH.—Ttatnncs six of". iiiulit weeks after the composition.. He dil not plo.se' down, beranse theyr", ! h;ad' ; expended a lot of money in (ramming tij- tiubcr. wli'iL-li .tunre(l. ; uju xo_.l)tL.j)f poor jiiaiily. ' .At j this 'stagiv Mi'. ■ MeChlggagej'-the/. -St-eur&d creditor, intimated that he had :a finjther appointment, lie would be ; glad if any rjufstion.-; concerning liim could be asked now. In fniswer to Mi-. Thompson: Mr. Mcstated that in October they nntiJij'il Derby Bros, that unless the. in- I teres! were paid they must foreclose. | Dorbf told bin! then that thev eoli!/I' go ■ no i'jirther without his. fMr, McChig•gagft'fe). assistance. At, the bankrupts, requcist lie then took,over the.concern.. Mr; .Thompson asked if the timber; rightk had been valued by any, indepyiiden( Jierson. Mr. McCluggjlge, replied thai anyone could have '"the whole show, timber ritrhts and all. for £2OOO. or even less for cash." , ; . Tin- D.O.A, pointed out that at; the time of the composition there was £247 due to W. Sliarrock as, wages or ,con : tract money, and that Mr. McOluggage had paid him £3O or so. "Mr. Mcolug f gage, said that Sliarrock had been paid his second di\idellil bi-eail-e lie. \va,s threatening to sue Derby. The books were; then handed to him, so that lie roithl reimburse himself out of the .book debts. But the book debts produced nothing. Mr. 'Mcßeili stated that in Xovember last, just prior to Xovember 0. when Mr. McC'luggage took over the mill, some timber was cut and carted to Toko, and consigned away in Derby Bros.' name. But before it left the ticket was altered from Derby Bros, to Met'luggage. That was before Xovember fi. Mr. Mcfluggage s : ,id that the stuff was consigned in his name on Xovember 7. JTe said that this was done because he had already found £3OO for wages, and because he had taken possession under the conditions of his mortgage. His security included all the property. Tie bad not deducted the proceeds from the amount of bis advance. Mr. Derby stated that' there were 11.000 feet of second-class timber at one mill when Mr. McChiggage took it over. Mr. Bevell: More like three elevens. Mr 1 . McOluggage: Then where has it gone ? [

Mr. Mcßeth: Thni's what we are trying to find out. Mr. <"'. D. Sole asked whether any creditors in the original assignment had bad their debts wiped off by contras. Mr! Derby said that Quin Bros., creditors to the extent of £7O. had had their

limber at flil per 100 ft loss in order to vjiie oil' the account. Mr. .). Masters said then; seemed to lie : n opinion that he was in this limber mm- '.ess. He had never had more than i I v shilling's worlh ni a time. .''•. Herb)': You've not had one sh.illiii' ■• worth .-'nice the lire. ". Sole th.'ii asked if any creditor l;-i received timber in this way through 1: -.lers mid Son. j Mr. Masters: N'one whatever. Tim bankrupt: Absolutely none. Continuing, lie said Mr. Boon had had £2 12s worth, which presumably had been set oil' against Mr. Boon's second dividend. The D.O.A. said that the agreement had been broken time and again. It had not been signed by the lirm of Derby Bros, at all. so apparently the creditors were bound not to press or molest the debtors, but the debtors were not bound to do vvliat they had promised to do. Mr. Sole elicited thai the bankrupts had sold limber principally to sound firms, who paid out every month, and then asked how it was that the firm had got so far behind. Asked by the D.O.A. as to whether he considered he had exercised due consideration, carp and thotighlfulness for his creditors when he started business again.' the bankrupt said that he had thought he could make a success of the venture, or he would never have started again. The D.0.A.: You have not only failed to pay what you .contracted to pay. but you got £OOO or ,6700 further b'ehindThere lias been a vast difference between promise and performance. Mr. George Derby said his experience of sawmilling was, "you either make money or lose it." In one month, owing to bad weather and sundry other causes, it would be all loss; then the next month 0" two it would be possible to make, money. The reason why he had not filed after the fire was that he considered it more manly to struggle through and give the creditors something. Arising out of the discussion, the D.O.A. remarked that the bankrupt almost admitted that he was insolvent before the fire. He was £7OO worse Off now. . r :

j Mr, Thompson wanted to know why J the stages men had not been paid in full jup to £SO, as agreed. Mr. Derby said I he luid not understood tliat.Jie. had to !do this. When the men asked for it. he I told ihom that to pay would.makc.him The whole of the proceeds of the. farm sold to Finch.am were rtjtain<ed byj the mortgagee, T. Shatter Weston, leavi'ijg £I4OO mortgage still 6'ii ''the rest of thf- property. : '■'■■''■ ■ Messrs Solo and Boon said -that;.the -creditors at the time of the composition were !all of opinion that the payment of Hid promised dividends Woiitft b'e' giiar'antcejl by the guarantor"Sp6k i eti i of at ' th'at'meeting. Mr. Boon askqiliwlivi-the I -baiikriupt had m>t,,k^nt i i inent.j seeing they" were" wiffing~to"\vait r-ftp-to 18 months for tlre.ir. dividend..of iTsifidlin the £v"-••-■> I ••' for Mr. MeCluggage, asked hiMh'ej rreditors would 'fa"e"rrTtkte"the Tatter's inbtainiiig. a.,.title , by, ,cpntjng ; ~a direct irnnsfer from (tie estate fo Mr!' ..Mf-f'liijggage, instead of eonTpellinj; him j to pr<J>ceeo* throngh tlie : Siifirerffe'tJoin'i'-' at 'considerable expense.' Jl - b •'/:.»•; i'i In drder to allow time -f/yi' thp/D.O.A. to prepare a schedule, of tl|c., assets eluded! in Mr.Me.Cluggage's 'arid : .■thus jtreat Mr.' fairly.j the meeting wiis atf jolMhtoivstiie d,i?. | '-' ;.;•. i' ..•■,;;:' i.o.'i,v,r.i;>;:i:;