UNUSUAL BANKRUPTCY.

Taranaki Daily News, 14 October 1922, Page 5

UNUSUAL BANKRUPTCY.

ATTRACTIVE BARGAIN SALES. GOODS AT HALF-PRICE. TARANAKI DRAPER’S ESTATE. The first meeting of creditors in tli bankrupt estate of Arthur Eley Waugl draper, of Kaponga (Mr. Dickson), wa held in the office of the official assigne at Auckland this Week. All the prin cipal creditors were represented. Thi case was transferred from Taranaki t meet the convenience of creditors, som of the largest of whom are Auckland firms. Tlie assignee, Mr. W. S. Fishel presided. Bankrupt’s schedule showed debt amounting to £9587, all owing to un secured creditors, and the assets 6 £5030, leaving a deficiency of £4551 The principal assets were: Stock-in trade at Kaponga and Manaia, £3590 plant and fittings, £800; book debtt> estimated to produce £500; and casl in hand, £l4O. Bankrupt, in a written statement, at tributed his failure to the recent slump and to his opening branches at Eltham Inglewood, and later at Manaia, caul of which proved unprofitable. The official assignee said tnat Mr. G C. Gorrie, accountant, had prepared trad ing, and profit and loss accounts .for the period ended July, 1922. Bankrupt alsc prepared trading, and profit and loss accounts, but perhaps unintentionally; through ignorance of accounts, his figures were compiled on entirely wrong principles, and were quite misleading. Mr. Gorrie understood that ail bankrupt’s previous figures had been compiled on the same basis* He believed the balance-sheet of August, 1921, to be approximately correct. The trading account and profit and loss account prepared 'by Mr. Gorrie showed gross loss in trading of £5291, and a net loss, after including expenses, of £BOO2. [Bankrupt, on oath, stated that he had purchased the Kaponga business in 1919. He could not say what he was worth at the time, -without reference to the books. He paid nothing for goodwill, but took over the goods at valuation, for which he paid 20s in the £. HEAVY LOSS IN TWELVE MONTHS. A letter from the former owner of the business, put in at this stage, showed that bankrupt had paid £1177 6s 6d for the vendor’s interest, having previously acquired an interest in the business. At the time of the completion of the purchase, bankruipt’s interest was £2400. He gave six bills as part of the purchase money, upon which interest was payable. Continuing under examination, bankrupt said he had not learned book-keep-ing. Concerning an allegation that he had been selling goods under cost price, bankrupt said he was not aware he had done so. He could not say he sold £26,000 worth of goods for £21,000. Some goods were sold under cost price The Assignee: Do you know that wholesale selling of goods under cost price went on? —-No. Did you keep the business, including the branches, under close personal supervision? —Yea. Is it a fact that you were advertising all over the place that you were selling goods under cost price? —I can’t say. What methods were used?—We only did what was generally done during sale time. Bankrupt said he believed himself to be solvent, but received a shock when he took stock. He could not say if the whole of the business or only the branches were responsible for the trouble. The Assignee: Would it be due to your selling goods under cost price. Can you give us any idea ?—1 don’t think I can exactly. BUYERS FROM ALL PARTS OF PROVINCE.

Bankrupt was questioned at length r by a creditor’s representative concerning statements issued by him showing 1 his position from time to time. He declared they were accurate. The Creditor’s Representative: Then ! it is fair to assume that bn August 19, 1921, your capital was £3445 8s i lOd?—Yes. If you started in August, 1921, with ’ £344*5, how do you account for the fact that in July‘this year your gross ' loss was £8000?—I don’t know, only that the slump and branches caused it. Bankrupt admitted holding half-price sales, but he stated that it was -well known that goods were sold which were not worth the money paid for them. He sold only unsaleable goods at halfprice. The Creditor: Is it not a fact that people from all over Taranaki attended these saels? —Yes; they may have done so. It stands to reason that pepole would not come from all over Taranaki to 'buy rotten stuff.

rotten csvuii. Did you sell any half-price goods to tradespeople?—l dont know if they or their agents bought any. Bankrupt, continuing under cross-ex-amination, said he had good reliable people for assistants and he had nothing to say against The Creditor: Neither had your clients apparently. Do you know that people came in and changed the tickets on the goods and frequently by this means got articles at very much less than the cost price, such as .an expensive hat for 2s 6d? Bankrupt: I don’t know anything about that. Previous bankruptcy recalled.

You were bankrupt once before?— Yes. about 16 years ago in Palmerston North. Mr. Dickson: That is ancient history. The Creditor: Did you acquaint your Auckland creditors with this fact when you took over this business? —No, I had got my discharge and was clear of it. When did you get your discharge?— In 1912. Do you know you got your discharge in 1916?—I thought it was back further than that. Mr. Dickson: I appeared for him then. He has come back to the fold again. The Creditor: On that occasion am you have to submit to a. public examination on account of the unsatisfactory nature of your bankruptcy?—What has that to do with it? Mr. Dickson: Tell them; it does not matter in the least. Bankrupt: Yes, I did. In reply to the assignee, bankrupt said he did not know what dividend his Palmerston estate paid to creditors. Examined by Mr. Dickson, bankrupt said that goods fell in value last year, and he had to sell suits coating £lO Xot

£7 10s, and hats costing £2 10s for 255. Farmers had had a strenuous time on account of financial stringency, and things were bad. It was resolved that, the assignee investigate matters in connection with the bankruptcy, and that the facts be placed before the Crown Solicitor. A committee was appointed to act in conjunction with the assignee in realising on the estate.