Francis Beaufort Palmer.

Company precedents for use in relation to companies subject to the Companies acts, 1862 to 1890 ... (Volume 2) online

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sd summons as by af£t appears ; and upon reading the order to wind
up, dated, &c., and the report of the off recr, dated, &c., and filed
the, &c., It is ordered that the persons named in the schedule hereto,
formerly directors or oflB.cers of the coy, do within four days after ser-
vice of this order upon them resply, submit and verify, or concur in
[making and verifying] a statement as to the affairs of the sd coy,
pursuant to the provisions of sect. 7 of the Cos (Winding-up) Act, 1890,
and to the Cos Winding-up Rules. And it is ordered that the sd several
persons named in the schedule hereto do pay to the sd X., the off recr

and liqr, the sum of /., his out-of-pocket expenses with reference

to this applicon. Concentrated Produce Co., 0095 of 1893 ; Eeg., 19th
July, 1893.

And see Form 148a.

Such an order is made, under sect. 7 (2) of 1890, where there is a doubt as to who
is the proper person to make the statement, and under sect. 7 (5) and E. 61 of 1890
in case of default in complying with sect. 7. But the application must he made in
each case by summons (not ex parte, but served on the persons required to make the
statement). The application must now be made to the judge personally, and the
order will not be made unless he is satisfied that the person required to make the
statement had proper materials for so doing. Colnmbian Gold Mines, W. N. (1894) 92.

Sect. 7 (5) of 1890 has been found insufficient, whereas if an order is obtained as
above the defaulter is liable to committal.



Form. 148a. Upon the two several applicons of B., the off recr, It is ordered that

; I TT L. of , do, pursuant to Eule 58 of the Cos Winding-up Exiles,

Another, with -, , -, m . -i ,- t i i ^ ^■,

directions as 1890, attend on the sd off recr at such time and place as he shall

to attendance, appoint from time to time by notice in writing addressed to the sd L.,

and served upon the sd L., by being sent by registered letter addressed

to the sd L. at afsd, or other the last-known address for the time

being of the sd L. And it is also ordered that L. do within, &c. [_as hi
Form 148], submit and verify or concur in and verify a statement of
the affairs of the above-named coy, pursuant to, &c. [os in Form 148],
and that the sd L. do pay to the sd B. the sum of /. for his ascer-
tained expenses of this applicon. \_Adjourn summons as to other respts,
irith liberty to restore.~\ North-West African Mineral Concessions, 00259
of 1895. Vaughan AVilliams, J., 18th Dec. 1895.



STATEMENT OF AFFAIRS AND PRELIMINARY REPORT.



157



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158



WINDING-UP BY THE COURT. [ChAP. XVI.



II. — As regards Contrihutories.



Capital issued and allotted,
viz. : —

Founders Shares of £

per share

Amount called up at £

per share, as per list
"L."

Ordinary Shares of £

per share

Amount called up at £

per share, as per list
"M."

Preference Shares of £

per share

Amount called up at £

per share, as per list
"N."

(Add particulars of any-
other capital)

£

Less unpaid calls estimated
to be irrecoverable . . . , £



Add deficiency to meet liabilities as
above



Estimated surplus as
above (if any) sub-
ject to costs of
liquidation



Total deficiency as
explained in State-
ment " 0."



I, , of , make oath and say that the above statement and

the several lists hereunto annexed marked are, to the "best of my

knowledge and helief, a full, true, and complete statement of the

affairs of the above-named coy on the day of , 189 — , the

date of the winding-up order.



Sworn at



this



day of , 189—.

Before me —



Signature



STATEMENT OF AFFAIRS AND PRELIMINARY REPORT.



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WINDING-UP BY THE COURT.



[Chap. XVI.



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1<66



WINDING-tJP BY THE 'COtTRT. [ChAP. XVI.



Form 150.

Affidavit of
concurrence
in statement
of afEairs.



{Title.)

I, A. B., of, &c. lor We, C. D., of, &c., and E. F., of, &c.] do hereby
make oath and say as follows : —

That I [or "We"] have perused the statement of affairs lodged herein
Ly , and that to the best of my [or "our"] information, know-
ledge and belief, such statement contains a full and accurate account
of the company's affairs [except paragraph 3, or as the case may be~\.

' ' I (Signature of deponent.')

this day of ''"'^

Before me —



— , 189—. )

a Commissioner for Oaths.



The statement of affairs is verified by the person or persons actually making it
swearing the short affidavit at tlie foot thereof, whicli forms part of Form 149, supra.

Summary of Statement of Affairs.
Tlie official receiver must also prepare " a summary of the company's statement
of affairs, including the causes of its failure, and any observations thereon which
the official receiver may think fit to make," for transmission to the creditors and
contributories — if possible before the fii'st meetings. See Sched. I., R. 3, to Act of
1890, and infra, Chap. XVII.



Form 151.

Summary of
statement of
affairs.



The following is a recent example of a summary of the statement of affairs sent
by the official receiver to the creditors and contributories ; but, except as to the two
forms of account, such statements differ widely according to the circumstances.

{Full title and reference to record.)

SUMMAEY OF THE STATEMENT OF AfFAIRS SUBMITTED BY THE SECRETARY

AJSTD Directors.
On the day of , 189 — , the date of the "Winding-up Order.





(I-)


As regards Creditors.




Gross
Liabilities.


Liabilities.


Expected
to rank.


Assets.


Estimated
to produce.


£ a. d.


Unsecured creditors (94)

Other liabilities (2)

(See observations.)
Loans on deben-
ture bonds (8)
deducted contra £


£ «. d.




£ s. d.










Other property






(See Observations.)
Book debts, viz. : —
Good










Doubtful £

Bad






Preferential credi-
tors (8) for rates,
taxes, wages, &c.,
deducted contra £






£






Estimated to produce

Bills of exchange on hand

Estimated total assets ...

Deduct loans on debenture bonds
secured on tlie assets of the
company as per contra

Estimated net assets

Deduct preferential creditors as
per contra














Estimated amount available to
meet unsecured creditors, sub-






Estiiiiati'd ilcticiency of assets to
meet liabilities of the company,
subject to co.sts of liquidation...




£


£




£





Thoro is no unpaid cai)ital liable to bo called up to meet the above deficiency.



STATEMENT OF AFrATRS ATSTD PRELIMINARY REPORT.



367



(II.) As regards Contrihiitorics.



Capital issued and al-
lotted, viz.: —

Ordinary Shares

of 1, per Share, of

which were issued

as fully paid to the

Vendors

(12 Shareholders.)

(£10,000 Shares cancelled.

See Observations.)

Add deficiency to meet
liabilities as above . .




£ ».



Obseevations.

The \dndiiig-up order was made on the peton of Mr. X., presented
on the , &c.

Mr. X. was the principal vendor to the coy, and subsequently,
either as "governing" or "managing" director, has had the
principal control of the coy's affairs throughout. He is now both
a creditor and a shareholder.

The statement of affairs, which should have been lodged, under a

certificate extending the statutory period, not later than the ,

1 8 — , was not filed until the , 1 8 — ; an applicon by the off recr

-, 18—. The



to the Ct to enforce its submission was made on the

statement is submitted by Mr. A., the secretary of the coy, Mr. X.

above-mentd, and Mr. W., another director.

The coy was registered on the, <S:c., and was formed for the purpose

of acquiring and carrying on the business of a manufacturer,

which had been, very shortly before, established by Mr. X. in , in

conjunction with one P.

The business was taken over as from, &c., and has since been
carried on at (the registered offices), and at .

The promoters of the coy were Mr. X. and Mr. D. The coy under-
took to pay the expenses of promotion.

The ppty acquired by the coy consisted of a lease of the premises,

buildings, plant, machinery, stock, &c., which were valued at 1.,

and certain patents which were valued at 1. Mr. X. has been

asked to furnish a statement showing what had actually been expended
upon the ppties up to that time, but has not yet done so.

The purchase price was fixed at the amount of the valuations, viz.,

/., and was satisfied as to /. in debentures, and as to 1.

in fully paid shares.



168 WINDING-UP BY THE COURT. [CliAP. XVI.

The wliole of the debentures and shares issued in satisfaction of the
purchase-money were handed to Mr. X., with the exception of 500

fully pd shares, representing L, which were given to Mr. D., in

satisfaction of his interest.

Subsequently, in , 189 — , the patents, which were included at

the sum of 1., having been ascertained to be of no value, Mr. X.

and Mr. P. each returned to the coy 1, in shares which had been

allotted to them ; but the necessary entries to give effect to this sur-
render have not yet been made in the register of members, and the

1, shares in question are also included in the present statement' of

affairs.

Particulars will be found in the following schedule as to the persons
who have constituted the directorate of the coy, with some particulars
as to their shareholding, &:c. [hei-e follotvs a table].

Mr. W. has also acted as solor for the coy and for Mr. X.

The qualification for directorship is the holding of shares of the
nominal value of 1.

It will be observed that Mr. W. does not hold the necessary quali-
fying shares, although Mr. X. states that he transferred certain shares
to him some time ago. No transfer has been registered.

The first secretary of the coy was Mr. F. On his retirement Mr. A.
was appointed secretary, and continued to hold that office until the
date of the winding-up order.

The nominal capital of the coy is 1., divided into ordinary

shares of 1, each. The first allotment appears to have taken place

on the , when seven shares ( 1.), were issued to the signatories

to the memorandum and articles of association. On the ,

shares ( 1.) were issued as fully-pd to the vendors, fifty shares

( 1.) for cash to a director, and one share ( 1.) for cash to

another person. On the , 189 — , twenty shares ( 1.) were

issued to another subscriber for cash, and no further issues have been
made. The total issue thus amounts to 1.

No shares have been in the ordinary sense issued to the public, nor
do the public appear to have been actually invited to subscribe for
shares.

In addition to the /. debentures issued to the vendor /. had

been issued to the public, full cash consideration being received in

most cases ; 1, appears to have been pd as commission on obtaining

certain subscriptions.

The debentures were offered to the public by means of a prospectus,
and appear to cover all tlie assets of the coy.

The /. held by Mr. X. have been charged by him to his

bankers for about /., and to another person for about 1. ; the

unissued debentures of the coy amounting to 1, have also been

placed in the hands of Mr. X.'s bankers for protection against issue to



STATEMENT OF AFFAIRS AND PRELIMINARY REPORT. 169

other persons. Tlio bank recently commenced a debenture action for

tlie protection of their interests, with the result that on the , 189 — ,

Mr. M., of , was appointed recr and manager on behalf of the

debenture holders, and immediately took possession of the assets,
which are being duly administered by him. The off recr is being
represented in the debentiu-e action, and active steps are now being
taken with a view to effecting a sale of the ppty. It is impossible at
the present time to state what is likely to be the ultimate result, but
hopes are entertained by the officers of the coy that a sufficient sum
will be realized to leave a surplus available for division amongst the
unsecured creditors.

The available working capital possessed by the coy at the date of

commencing business appears to have been about 1., a sum which

was obviously insufficient.

The insolvency of the coy is attributed generally to the want of
capital, and to pressure by trade creditors ; but the off recr is inclined
to think that there has also been some laxity in the management of
the business. Some of the items of expenditure {e.g., " salaries and
wages") appear to be exceptionally heavy for the extent of the coy's
business.

The deficiency is explained in an account of which the following is
a summary : —

Gross profit arising from carrying on business from
date of formation of company to date of Wind-
ing-up Order (estimated to balance) £

Cash received for damag-e by fire from various com-
panies ■RT-th wbom insiu-ances were effected,

November, 1894)

Deficiency as per statement of affau-s ....

Total amoxmt to be accounted for £

Expenses of carrying on business from date of
formation to date of Winding-up Order, viz. : —

Salaries and wages, including dii'ectors' remunera-
tion ,

Rent, rates, and taxes

Interest on loans

Miscellaneous expenses, including commissions,
valuation charges, carriage, advertising, legal
expenses, stationery, travelling, insurance, &c..

£

Bad debts

Difference between the value of assets, as appear-
ing in the books and as now estimated for realiza-
tion: —

Buildings, Plant, Tools, Utensils, &c £

Patents ,

As above £



176 WrNDING'UP BY THE COURT. [ChAP. XVI.

The books of account (apart from one or two imperfections in detail)
appear to be of tbe usual and proper character, and the recr and
manager for debenture holders has given the off recr all reasonable
facilities for their inspection, but as some of the books have been in

more or less constant requisition at the works in it may bo stated

that the oil recr's examination of them has up to the present time been
somewhat limtd.

There are creditors, shareholders, and debtors.

The unsecured indebtedness includes 1, owing to Mr. W., and

1, to Mr. X. for money advanced. The indebtedness to Mr. X.

represents the sums borrowed by him from his bankers on the security
of his debentures and advanced by him in turn to the coy.

The ''other liabilities" (not expected to rank for dividend) are in
respect of damages for breach of contract in two instances.

The "other property" includes the buildings, engines, boiler,

shafting, machinery, tools, &c., at the works in ; and the sum of

1, is stated to have been inserted in the statement of affairs as

their value after consultation with independent persons competent to

give an opinion. 1, represents the estimated value of the ppty, if

sold as a going concern ; if sold at a break-up price, it is estimated

that not less than /. would be realized. The difference between

the present estimated values and those fixed when the business was
acquired by the coy will be noted.

The Railway Coy have in contemplation an extension of their

line, which may materially affect the ppty of the coy. A bill has been
drawn, and will, in all probability, in due course, come before Parlia-
ment; but meantime steps are being taken to protect the coy's
interests.

The patents acquired from the vendors are still held by the coy, but
as previously meutd they are reputed to be of no value.

The first meetings of creditors and shareholders were held at ,

on , 189 — ; the meeting in the latter case being adjourned to

, 189 — ; in the result the off recr was continued in office as liqr

with a committee of inspection consisting of the following persons : —
Messrs. &c. — all being creditors of the coy. These appointments have
since been confirmed by the Ct.

The off recr is of opinion that there are no facts in the case which
wiU make it necessary for him to apply for an order for the public
examination of parties.

G. S. B.,

(Date.) Off Recr and Liqr.

[Note. — The sale of the coy's effects will take place at , on

tho , 189 — . Particulars of sale will bo forwarded in due course

to tho principal creditors, and to any other persons interested who will
make applicon to tho off recr.]



STATEMENT OF AFFAIRS AND PRELIMINARY REPORT, 17)

Preliminary Report.

{Full Title and Reference to Record.) Form 152.

The off recr in pursuance of sub-sect. 1, sect. 8, of tlie Cos i>nirmiuary~
Winding-up Act, 1890, reports to the Ct as follows : — report.

Capital. — The capital of the coy is /., divided into 8 p.c.

preference shares, and ordinary shares, all of \l. each.

Subscribed Capital. — The subscribed capital amounts to 1., being

ordinary shares of \l. per share held by twenty-seven shareholders,

and preference shares of 1/. each hold by shareholders. The

whole of the subscribed capital has been called up.

Paid-up Capital. — The capital pd up and considered as pd up
amounts to 1.

Assets. — The total assets of the coy amount, according to the valua-
tion of the officials of the coy in the statement of affairs, to 1., and

consist of furniture, plant, machinery, and book debts.

Unsecured Creditors. — The amount of the coy's indebtedness, accord-
ing to the statement of affairs, is /.

Causes of Failure. — The failure and insolvency of the coy are
attributed by its officials to the following causes: — want of working
capital ; the falling off in speculative business and declining receipts ;
the markets going against the business, and the absence of the



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