“NO CAPITAL”

Taranaki Daily News, 10 September 1921, Page 7

“NO CAPITAL”

FAILURE OF MOTOR BUSINESS.

PROPRIETOR MADE BANKRUPT* “All the creditors know this is a most complicated bankruptcy,” remarked one of those present at a creditors’ meeting held yesterday, and the subsequent events bore out this statement. The meeting had been called to discuss affairs in the estate of Francis H. T. Washbourne, motor garage proprietor, of New Plymouth, who was adjudged bankrupt on his own petition on August 31. There was an attendance of about twenty-five, the Deputy-Official Assignee (Mr. J. S. 8. Medley) presiding. Mr. C. H. Croker acted for Washbourne. There was a little diversion at the beginning of the meeting, when the D.O.A. said: “Well, gentlemen, the only one missing is the principal party, the bankrupt.”

There was immediately a run of questions, and the ‘bankrupt’s solicitor replied that Washbourne was supposed to be at a meeting of directors at Inglewood in the morning.

“Will he be back?” enquired a creditor, whose tone' caused some laughter. The D.O.A. was about to put into effect a suggestion to “ring up the garage,” but was saved the trouble, as the bankrupt appeared ip the doorway, and the meeting settled down to business.

The statement of affairs showed: Unsecured creditors, £l9Bl 6s 3d; assets were set down as book debts (good) £205 Is; cash in hand, £2 2s, a total of £207 3s available for creditors. This left a deficiency of £1774 3s 3d. Under tfie heading of partly secured creditors there was a sum of £2286 3s sd. in the name of C. Honey field. The security over plant, cars, stock, etc, was shown at £2062 Ids 4d, and the creditor appeared in the unsecured list for the balance, £223 5s Id. BANKRUPT’S STATEMENT. Bankrupt’s statement was as follows: —I commenced business on my own account at New Plymouth as a motor garage proprietor in 1914 with practically no capital. I carried on business on my own account for some time, and was later joined in partnership by Mr. Byrn, now of Tauranga. The partnership between Byrn and myself was dissolved in 1918. Upon dissolution with Byrn 1 had to find about £2OO in payment of the firm’s liabilities, and for £75 cash to get Byrn out of the,business. I have been severely handicapped ever since I started owing to want of capital, and the business J was doing. I am now satisfied it was far too large an affair to run without capital. The recent severe slump has made my position hopeless, and I have been forced to seek the protection of the Court FLOATING THE BUSINESS. Some nine or ten months ago I endeavored to float the business into a limited company, and about £lO,OOO worth of Capital was promised by various proposed subscribers, but at the commencement of the slump, and practically from Christmas up until June last it. became increasingly difficult. to get the proposed subscribers to sign for the shares they had promised to take up, and finally the company was registered with a much smaller capital than it had been hoped to obtain. A preliminary agreement had been entered into by one with a trustee on behalf of the company to sell my business to the company in consideration of the company taking over my . business liabilities. Owing to the slump and to the fact that the company did not get the subscribed capital it. had anticipated, the company would not adopt the agreement to purchase my business. Subsequently the Phoenix Motors, Ltd., proposed to pay my creditors 4s in the £ on all accounts included |n a certain schedule-attached to the agreement and incurred prior to March ! last, but no definite arrangement was made with my creditors to accept this. A counter offer was made by some of the creditors to I accept 6s in the £, but the company refused to make this offer, and, in any case, spveral creditors notified my solicitor that they would accept no compromise of/any hind whatever, and two of these creditors issued warrants for my They would neither hold over the warrants nor negotiate with my solicitors or with the company in regard to a dividend. I had either to go to gaol or file my petition. I am now working for the company at a salary of £5 per week as a motor mechanic.

A PREVIOUS MEETING GF CREDITORS.

It transpired that a preliminary meeting •of creditors had been held some weeks ago, when the affairs disclosed that the estate might realise 2s 3d in the. £. On tfyat occasion creditors had offered to accept 6s in the £ as a settlement, but nothing eventuated. In reply to the D.0.A., bankrupt stated through his solicitor that he could make no offer. During the negotiations concerning the offer of 6s, notification was received that two of the creditors were not willing to agree to any compromise. Warrants of committal were issued against Washbourne, and effort's to have these proceedings stayed were not successful. He was placed under arrest, and to avoid going to gaol fie filed. The Phoenix Motor Campany, who succeeded Washbourne, held a meeting, but were not- willing to pay 6s in the £, but they proposed to make any offer if the creditors who were pressing Washbourne could ho persuaded to hold over their warrants. They would not do this.

Bankrupt waa asked what the company paid him for the business, and he replied, “Nothing at all.”

The D.0.A.: Why did you give it over? —Well. I could not help it. Mr. Croker said that Mr. Honeyfield exercised his claim over the plant and stock, and at the same time Washbourne’s landlady, to whom £B9 was owing for rent, put in the bailiff. After further questioning, Mr. R. H. Quilliam (representing certain creditors) remarked that apparently Washbourne did not take much interest in these affairs.

Mr. Croker informed a creditor that no statement of accounts had yet been received front the mortgagee.

The D.0.A.: What stock, was there above what Honeyfield took and that secured bv the landlady?

Bankrupt. There has been practically none, as f had been unable to put any in. There, was just the . original machinery, and cars that were paid for out of the money he advanced.

It was suggested that Washbourne should secure a list of stock that Honey field took over. ' A creditor remarked fhat Honeyfield

was not only a creditor of Washbourne’s, but also a shareholder of the Phoenix Motors, Ltd., and Washbourne appeared to have been left out of it.

Mr. Quilliam said the affairs were rather complicated. Since March last the business had been in charge of Mr. Weir, acting for Honeyfield; they had suggested \\eir might have been acting for the company. Then there was the question of whether representations made by the company, or on their behalf, had resulted in goods being supplied to Washbourne. In answer to the D.0.A., the bankrupt said he had been allotted 3000 shares in the company, but nothing was paid on them. « Mr. Croker suggested that the shares were available to creditors, and if they were taken up a dividend could be paid.

The meeting decided that nothing further could be done till enquiries were made, and it was decided to adjourn to a future date, the D.O.A. to make investigations in the interim. LIST OF CREDITORS. The list of creditors was:—Derby and Co., £4 6s 3d; Cytril Wilson and Co., £3 3s; E. A. Elliott, £1 13s 6d; J. E. Nixon, £5 2s; Mortlock and Co., £4; Smart Bros., £5 7s fid; A. 8. Hasell, £2 Ils 6d; Gibson and Ay ling, 3s sd; C. Johnson, £l’B 13s 9d; Jelly man and Forbes, £7 19s Id; Electric Light Department, £23 10s 6d; Pacific Motors, £34 Is lOd; N.Z. Farmers’ Co-op., £8 16s 4d: Newton King, Ltd., £33 7s lid; J. Chambers and Son, £8 10s 8d; Motor Specialities, £6 9s 8d; Motor Import Co., £l2 Is 9d; J.P. Hardware, £l9 2s 3d; A. R. Waldie, £7 2s 6d; E. Marsh, £44 Is; Taranaki Motors, Ltd., £3; Vai. Duff, £4l I2s; Farmers’ Coop., Hawera, £7 18s sd; Chapman's, Ltd., £2l 19s; A. E. Asherwood, £8 2s; E. J. Shackleford, £7 18s; R. Whale, 6s 6d; J. Jenkinson, £l5 175,6 d; Laird’s Motor Agency, £8 10s; Stone ' and Stone, £3 18s 6d; Levin and Co., £l4 12s; Leighton and Son, 12s; Motor Garage Proprietors’ Association, £4 14s; Pidgeon and Co., £47 8s Id; Bruce and FeaJdns, £4 19s 6d; Hooker Bros., £22 Ils sd; Rollo and Millar, £3 IBs 6d; Hope, Gibbons and Co., £22 12s 9d; L. S. Kelly, £3 15s; Wanganui Indent Co., £1 10s 8d; W. H. Simms, £8 4s 6d; H. Inglis and Co., £35; Vacuum Oil Co., £244 7s 3d: A. and G. Price, Ltd., £52 2s 6d; Maling and Co., £l5B ]9s 6d; Wm. Croaker and Co., £2 2s; Hutchinson and Wilson, £l6 19s 3d; G. R. Weir, £131; McLeod and Slade, £4O 18s 9d; A. R. Hislop, £6O 19s Id; R. Badge, £6 10s; Arnold George, £8 16s Gd; Watkins. Tyler and Tole, £6 ss; Trade Aux. Co., £4 19s; Taranaki •Daily News, £52 4s 9d; E. W. Mills and Co., £29 19s 3d; J. J. Niven and Co., £4 17s Gd; Jenkinson and Mack, £4 2s; Bergougnan and Co., £92. 15s 7d; E. J. Ward. £4 8s Gd: Letherine Co., £1 7s; J. Abbott, £8 6s lOd; John Burns and Co., £3l 8s lOd; A. E. Sykes, £2 6s; Redpath and Son, £2 4* 3d; J. B. Clarkson. £1 0s lid; Bass Bros., £1 Is 6d; Taranaki Herald, £l4 10s 3d; A. Locke, £63 8s 3d: C. H. Croker, £105; Stainton and Co., £45 Is 8d; Roy and Nicholson. £ll 12s 10d; Chas. Honeyfield, £223 5s Id; Union Bank, 3s 2d?—Total, £l9Bl 6s 3d. The total sundry debtors’ accounts was £5-81 8s Gd, of which £376 7s Gd was considered uneollectable, leaving available for collection £205 Is.