ECHO OF BANK FUNDS.

Manawatu Standard, Volume XLVII, Issue 6, 4 December 1926, Page 10

ECHO OF BANK FUNDS.

ACTION BY OFFICIAL ASSIGNEE. CASE BEFORE SUPREME COURT. Per Press Association. NEW PLYMOUTH? Dec. 4. The arrest of a bank manager at Stratford last year, on charges of embezzling, and his bankruptcy subsequent to his imprisonment, were responsible for involved litigation before the Chief Justice (His Honour Mr C. P. Skerrett), in the Supreme Court. The Deputy-Official Assignee asked that a deed of arrangement between William Kerr, now undergoing sentence, and the Union Bank of Australia and others, should be set aside as void under the Bankruptcy Act. After lengthy argument, decision was reserved. Briefly, the position was that early in July, 1925, it was discovered that Kerr, then manager of the bank at Stratford, had been embezzling the bank’s funds, and using them to acquire valuable timber rights on the West Coast of the South Island. Messrs J. H. Robs&n and T. A. Sullivan had an option over these rights, and Mr R. R. Binnie was induced by Kerr to send £IOOO to enable the purchase to be made. Some of the bank’s money was used for the same purpose. On discovery of the irregularities, a deed of arrangement was executed on July 9, at the instance of the bank, between the ba'nk, Robson, Sullivan, Binnie and Kerr. Under the deed it was provided that the timber rights should be transferred to the bank, which was empowered to sell them on any terms thought fit and to apply the proceeds (1) in payment of the costs incurred by the bank over the trouble; (2) in payment of the money stolen (including other moneys; than those used for the purchase of the timber rights) together with interest; (3) a payment to Binnie of £IOOO with interest at 10 per cent.; (4) in payment of £IOOO to Robson; (5) in payment of out of pocket expenses to Sullivan; (6) any surplus to be divided between Robson and Binnie. Shortly afterwards Kerr was arrested on various cha/ges of theft, and sent to prison. On August 12, 1925, he was adjudicated a bankrupt, and as a result the Deputy Official Assignee now attached the deed and asked that it be set aside as being in fraud of Kerr’s creditors.