The Failure of Messrs. F. Noble and Co., Ltd.
Deficiency, £16,000;  £17,684 Bad Debts In Two Years
Rushden Directors

  The creditors of Messrs. F. Noble and Co., Ltd., leather merchants, &c., 272, 274, and 276, Hackney-road, London, N.E., met on Wednesday at the Boot Manufacturers’ Association offices, Fore-street, E.C.  Mr. Samuel Barrow, jun., J.P. presided.

  The business was carried on at one time by Mr. F. Matthews, and after being wound up in bankruptcy the concern was taken over by Mr. George Denton, of Rushden, who traded as F. Noble and Co.  The limited company was registered in October, 1905.  The nominal capital was £15,000 in ordinary shares of £10 each.  In consideration of stock-in-trade, furnishings, fixtures, etc., 1,000 shares were allotted as fully paid up (500 Preference six per cent. and 500 Ordinary).

  The directors were Mr. George Denton, senr., Mr. George Denton, Junr., and Mr. Frederick Noble, all of Rushden.

  Mr. A. C. Palmer submitted the following statement of affairs:-

As Regards Creditors Liabilities

Assets

As Regards Shareholders

  Proceeding, Mr. Palmer said the fully-secured creditor was Mr. Thomas Lilley, in respect to the following advances:- June 4 last, £250; July 4 last, £300; July 5 last, £450; July 11 last, £500; July 17 last, £500, making £2,000, which, with interest to date at 6 per cent, made £2,020.  As security Mr. Lilley held an assignment of book debts dated July 10, 1907, under which Mr. George Denton was jointly liable with the company for the repayment of the loans.  The assignment specified certain debts due to the company, and according to the schedule of the debts they amounted gross (good) to £2,652/17/3, which, less a discount of 5 per cent., left £2,520/4/5, showing the surplus of £500/4/5 placed to the credit of the assets.  The contingent liability mentioned on the statement of affairs was in respect to leases.  This was an uncertain amount, so he had not ventured to put down any sum in connection with it.  He did not think the dilapidations under the leases, which fall in on September 30, would be very serious.

  As to the assets, Mr. Palmer said he had taken 10 per cent. off the cost of the leather, and 15 per cent. off the boots and grindery.  The stock at Aldershot was in connection with a shop the company held there, and that at 8, Goldsmith’s Row, was at a shop the company had in that place.  Off the book debts he had had to take a very large amount.  The figures might seem appalling to those present, but he did not think he had taken off a copper too much.

  With regard to the book debts Mr. Palmer gave the following particulars:-

  The creditors would see, said Mr. Palmer, what a very large amount had had to be deducted from the book debts.  Many of the book debts he knew to be bad, while in other cases the book debtors were paying by small instalments, and when their supplies were stopped he did not know what would be forthcoming.  From the figures given they would see that adding the capital of the company to the deficiency shown on the statement, the total deficiency was £16,706/8/11.

  Continuing, Mr. Palmer said the company was incorporated on October 25, 1905, to take over from Mr. George Denton the stock, fittings, leases, &c., of Mr. Frederick Matthews, which he (Mr. George Denton) had purchased.  The directors were Mr. George Denton, his son, and Mr. F. Noble.  The capital was represented in cash or goods, with the exception of £500 credited as interest on the purchase money.  Nothing was put down for goodwill, so that £16,700 had been lost since the incorporation of the company.  When the business was taken over Mr. Carr was appointed secretary and manager.  He occupied those positions for some time, but, later, Mr. Green took Mr. Carr’s place when the latter left.  Had this change taken place earlier the position of affairs might have been different, for the bad debts had not been made in connection with recent ventures.  The books had been well kept and audited periodically by Messrs. Theo. Jones & Co., and balance-sheets had been got out.  The last prepared was up to June, 1907.  Neither Mr. Denton nor his family had drawn anything out of the business except £25 and £12 for season tickets.

  Turning to the deficiency account, Mr. Palmer said the balance-sheet of June last showed a deficiency of £4512/6/5.  Mr. Palmer, starting with that figure, gave particulars of sums which he had wiped off.

  The most alarming – the most ghastly – aspect of this case, said Mr. Palmer, was that during the period of about two years with which he had dealt he had written of £17,684 for bad debts.

  Mr. Daniels: On what amount of trading?

  Mr. Palmer: From February 4, 1904, to December, 1905 – the company took over the business as from the date Mr. Denton acquired it – the trading amounted to £53,000; from December 16, 1905 to December, 1906, it was £37,000; for the six months to June 30, 1907 it was £21,500; and from June, 1907 to September 4, 1907, £3,481.

  Mr. Palmer added that the company was now in liquidation, and the only hope was whether anyone would take, not the book debts and goodwill, but the stock, fittings, and possession of the premises, the leases of which expired on September 30.  If taken over in that way they would get more for the fittings and would not have such a large claim for dilapidations.  That was the only hope.  Several of the debts assigned to Mr. Lilley were dovetailed in with those due to the company, but he did not think there would be any difficulty in arranging that matter, as the assigned debts were specified.  He (Mr. Palmer) had been asked whether this assignment was a preference, but he pointed out that the actual cash lent was paid into the bank, and was paid to creditors in meeting bills as they came due in July, when the money was advanced.  If that had not happened the bills would not have been met.

  The Chairman: What was Lilley and Skinner’s account then?

  Mr. Palmer: It was nothing to do with their account.  It was a specific loan.

  The Chairman: It was a large amount to lend in twenty-one days.  What was the object?

  Mr. Palmer: It was thought that the company would be able to pull through.  I am reminded, however, that Mrs. Thos. Lilley is Mr. Denton’s sister.

  A creditor: Has notice of the assignment been given to the book debtors?

  Mr. Palmer: Notice was sent out a week ago.  The resolution for voluntary liquidation was passed to-day.

  Mr. Henry Levy: Is there any offer?

  Mr. Palmer: I suggest that the creditors should appoint an advisory committee to advise me as to the realisation and mode of dealing with the estate.  It is utterly useless to make any proposal.  The company is derelict, and it is a pity it was not wound up before.

  Mr. Palmer added that with the exception of the management and the fearful loss on bad debts there were no transactions by the directors to call in question.  All the money had been lost in the business.

  The Chairman: Did they make a profit? It seems somewhat unfair trading.

  Mr. Palmer said the company had made a good gross profit.  If the company had tried to scour the East End of London for scum they could not have been more successful.

  The Chairman: Have you ever in your experience had such a case?

  Mr. Palmer: No.  I do not think I have where the bad debts have been so heavy.

  An advisory committee was appointed.

Private Meeting

  At the conclusion of the above meeting such creditors of F. Noble and Co., Ltd., as were present, and who held the personal guarantee of Mr. George Denton, met separately.  Mr. Denton was not in attendance, but was represented by his solicitor, Mr. Pettitt.  Mr. A. C. Palmer was able to explain Mr. Denton’s personal position, and to offer terms of settlement to the guaranteed creditors.

  Mr. Denton owns much property in Rushden and district, and is interested in several businesses.  His assets exceed his liabilities, even after taking his losses in the Noble business into account.

  An offer was, therefore, made on Mr. Denton’s behalf to furnish a sum of £2,000, to be divided rateably among the guaranteed creditors, over and above the dividends which may accrue to them from the realization of the assets of the company.

  In round figures the guaranteed debts amount to £8,000 out of a total of £12,921.

  Also, in round figures, the company’s assets look like a dividend of 10/- in the £, thus leaving an estimated deficiency of £4,000 covered by Mr. Denton’s guarantee.

  Towards this deficiency Mr. Denton offers, as stated, to pay £2,000, and, after hearing all that could be said, it was decided that the offer should be accepted.  This, however, was subject to two provisions.  First, the dividend due to the firm of Messrs. B. Denton and Son is to be assigned to Mr. A. C. Palmer as trustee by way of security; secondly, the rights of the guaranteed creditors are to revive should any hitch occur in the carrying out of this understanding.