The Rushden Echo, 3^rd December, 1920, transcribed by Gill Hollis

Rushden Boot Firm’s Failure
Large Orders From A Bogus Millionaire
Deficiency of Nearly £4,000

  A meeting of the creditors of Messrs. C. Hodson and Sons, Ltd., shoe manufacturers, Harborough-road, Rushden (in liquidation) was held on Monday at Franklin’s Hotel, Northampton.  Mr. H. Claude Palmer (Joint liquidator with Mr. L. G. Roberts) presided.

  The statement of affairs showed total liabilities £6,859  15s.  2d. (unsecured creditors £6,094  0s.  7d.), net assets £4,039  2s.  8d.  This left a deficiency of £3,820  12s.  6d. as regards creditors, and a deficiency as regards shareholders of £1,079, making the total deficiency £3,899  12s.  6d.  The assets included book debts of about £5,864  17s.  5d., but these were only estimated to realise £1,327  15s.  7d., a debt of £4,206 from one customer (S. A. Levy, Manchester) being regarded as irrecoverable.

  Mr. Palmer explained the

Statement Of Affairs

which had been prepared by Mr. Roberts and himself, and the basis upon which the figures had been got out.  The business was started by Mr. Hodson, senr., about April, 1916, previous to which he was a shoe laster.  He was successful from the beginning, and secured quite a nice little turnover, the sales increasing from £6,694 in the first year to £25,118 in the last ten-and-a-half months, and the net profit from £240 to £1,679.  In December, 1919, the business was converted into a limited company, with a capital of £5,000, on the lines of the balance-sheet of December.  Figures were prepared dealing with the whole of the assets and liabilities, and showing the capital due to Mr. Hodson, for which he had shares allotted to him.

  The company went on in the ordinary way, and in August last an account was opened with S. A. Levy, of Manchester, who was introduced as a

Millionaire.

  Certain inquiries were previously made, and for a time the goods were regularly paid for.  After a time, however, there was a failure in the payments, and the firm began to get rather nervous.  Inquiries were made with unsatisfactory results.  The firm’s traveller could not find Levy, and he was said to have gone to South Africa, France, or America. Worried by the position of affairs, Mr. Hodson saw his auditor (Mr. Roberts), who consulted him (Mr. Palmer) on the position and the best course to pursue.  They decided that if the money owing by Levy (£4,200) was irrecoverable, the firm must go into

Liquidation

to protect its creditors.

  There were four or five creditors who dealt with the firm prior to the incorporation of the company, and who thought they were entitled to claim against Mr. Hodson personally, but the statement of affairs included assets to the amount of £212 due to Mr. Hodson, and if he was proceeded against he would counter-claim for the amount due to him, and which was transferred to the company.  It was the intention of Mr. Hodson that the whole of the assets and liabilities should be transferred to the company, and his position was exactly the same as before the incorporation.  The factory was purchased for £750 by, and was in the name of, Mrs. Hodson, who had effected a mortgage upon it and secured a loan of £515.  The deeds and loan were in the name of Mrs. Hodson, and, therefore, the mortgage on the factory was excluded from the statement of affairs.  Mr. Hodson and his son were both

On The Rocks,

but they felt that, as directors, they would like to come and face the music.  Their present unfortunate position had been brought about by one thing alone, and that was the bad debt of £4,200.

  In reply to questions, Mr. Palmer said that up to the present no proceedings had been taken against Levy.  The result of the inquiries made as to his whereabouts was very unsatisfactory.  “If we can possibly get hold of him or any of the goods we shall certainly do so.  No stone will be left unturned to find him.  We shall move heaven and earth to get something out of this asset.”  It was a very sad state of affairs when a firm was

Brought To Grief

by a transaction of this description.

  A Creditor:  Is Levy known to have any assets in England?

  Mr. Palmer:  He has left no assets.

  Replying to another question, Mr. Hodson said the last money he received from levy was £403 on October 11^th.  The account with Levy was opened on August 9^th, and he had paid £1,523 altogether.  During the month of October goods to the value of £2,300 were sent to him.  Discount of 6¼ per cent. was taken by Levy on the payments made up to October 11^th.

  In answer to Mr. A. Garratt, Mr. Palmer stated that Mr. Hodson held 677 shares in the Company.

No Actual Cash

was put into the Company on its incorporation, shares being allotted in consideration of agreements.

  Mr. Garrett:  Then it becomes quite a question whether the Company ever existed.

  A creditor asked whether Mr. Hodson possessed any asset independent of the Company.

  Mr. Palmer:  I think not.  I understand he is bankrupt himself.  I take it that Mr. Hodson has nothing left.

  Mr. Hodson:  Nothing at all.  My son is in the same position, and my wife only has the bank arrangement, which is of no value.

  Mr. Hodson added that there was only one payment due to the firm when the last lot of goods were sent to Levy.

  The meeting confirmed the appointment of Messrs. Palmer and Roberts, and appointed a committee of inspection to consult with them as to the administration of the estate.

The Rushden Echo, 19^th  October, 1923

Mr. L. Hodson’s Affairs - Deficiency Through Bad Debts

  A meeting of creditors of Mr. Leonard Hodson, boot manufacturer, 14, Crabb-street, Rushden, trading as Hodson & Co., was held on Monday at the offices of Messrs. Simpson and Mason, Rushden.

  The statement of affairs showed liabilities £464  10s.  2d., of which £90 was in respect to a cash loan by Mrs. C. Hodson, mother of the debtor.  The assets included: Cash, £4  17s.  3d.; sundry debtors, £56  1s.  8d.; stock, £44  7s.  9d.; plant and machinery, £23; and surrender value of life insurance policy, £7.  Deducting £1 for rent, the net assets amounted to £134  6s.  8d., leaving a deficiency of £330  3s.  6d.

  It appeared that the debtor and his father, Mr. C. Hodson, were directors of the late company, C. Hodson & Co., Ltd., Rushden, which went into liquidation in 1920.  The debtor during his trading experience made a number of bad debts, amounting in all to over £500, which fully accounted for the deficiency and the loss of capital.

  A resolution was passed accepting a composition of 5s. in the £ by instalments – 2s. in 14 days, 1s.  6d. at three months, and the remainder at six months.  The arrangement was accepted subject to the cash creditor waiving her claim until the composition was paid in full, a deed of composition to be executed to Mr. H. Claude Palmer, F.C.A. (Messrs. A. C. Palmer & Co., chartered accountants, Northampton).