HOW SOLVENT ESTATES ARE TREATED IN BANKRUPTCY:

Inangahua Times, Volume II, Issue II, 29 April 1881, Page 2

HOW SOLVENT ESTATES ARE TREATED IN BANKRUPTCY:

The following statement of the cost of winding up a solvent estate in bankruptcy has been forwarded to us, says the Economist, under circumstances which leave uo doubt as to its complete accur« acy, incredible as it appears at first sight. The bankrupt was a jeweller and silversmith. The property realised £1250 11s 4>i i the debts being: £18 15s 6d ; stock of furniture. £1231 15s lOd. There was paid to preferential and secured creditors, £289 3s 6J, leaving the net assets £961 7s lOd. The expenses of realization were : law charges £22 11s 8d ; taxed charges (auctioneers, &c ) £177 12s 3d ; and incidental outlay £29 15s 5d ; total, £945 16s Bd. There was paid to the creditors £9 17s 2d, which produced a dividend of 3d in the £. thus showing that the total amount of secured , preferen* tial, and unsecured debts, was only £1077 169 10,1, or £172 14s 61 less than the amount of realised assets. It will be observed that the realised proceeds show the estate to hare been entirely solvent, bat that the expenses consumed such a vast proportion of the proceeds that a dividend of " threepence in the pound " w*s all the unsecured creditors received. There can be no doubt that the stock and furniture, which realised £1231 15s lOd, would have produced considerably more under different circumstances, and it would be interesting to learn how it was that this most undoubtedly solvent debtor found his way or was forced into the Bankruptcy Court, but the proceedings filed do not disclose this information ; but how he and his creditors fared after he got there ; .s stated with considerable candour. Not having paid a dividend of 10s in the £, and his creditors not having passed a resolution that bis inability to pay such a dividend bad arisen from circumstances for which he could not justly be held accountable, although in this case such a resolution might have been most righteously passed, "the debtor is now an undischarged bankrupt ; " and the creditors instead of getting 20s in the £, received exactly an eightieth part of that sum. Ho*r it happened that the collec* lion of book debts amounting to £18 15s Gd. and tho sale of jewellery, plate, and furniture should have required an expenditure of £9!5 16s 8.1, is a mystery. We have, adds the Economist, in more in* stances than one kaowu entirely solrcn-

traders so .bevrildercd by the su-idm demand for the payment of a sum in ready money which they were not im« mediately ready to meet, as to placo their affairs in the hands of professional men, who by their honourable conduct and the advice then tendered have saved the trader from discredit and ruin. The vie« tim, as we must term him, in this case found that bis own destruction brought no sdrautage to his creditors.