CO129-443 - Governor Sir May - 1917 [7-9] — Page 258

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CHS. J. GAUPP & Co., In Liquidation.

Account showing the manner in which the winding-up of the firm has been conducted and the property of the firm disposed of, for submission to the Creditors of the firm.

1. The firm was ordered to be wound up on the 29th of October, 1914, by order of the Hongkong Government under Section 5 of the Alien Enemies (Winding-up) Orli- nance, 1914, the undersigned being appointed Liquidators.

2. The firm carried on the business of Jewellers, Watchmakers, Goldsmiths, Silver- smiths, makers of Nautical and Scientific Instruments and Agents for the publishers of Admiralty Charts, the latter being au important part of its business.

3. According to a partnership deed dated March, 1914, which came into the possession of the Liquidators the partners of the firm were Messrs. C. O, G. Heermann and O. Wagner. Mr. C. F. Heermann was believed to have been a partner but evidence was brought to the Liquidators' notice that he was not connected with the business otherwise than as Manager. A Power of Attorney from Mr. C. F. Heermann in favour of Mr. C. Bunje was shown to the Liquidators in which the former described himself as trading in Singapore under the name and style of Chs. J. Gaupp & Co. The Power of Attorney was executed two months (January, 1914) before the deed of partnership between Messrs. C. O. G. Heermann and O. Wagner, previously referred to, and it would appear, therefore, that Mr. C. F. Heermann was not a partner in the Hongkong business, since he must have necessarily been a party to the partnership deed were he a partner in March, 1914.

4. By an Agreement between Mr. C. F. Heermann, representing the firm, and the Hongkong and Shanghai Banking Corporation, the former pledged all the goods in the firm's possession (other than consignment goods) to secure the firm's indebtedness to the Bank. Messrs. C. O. G. Heermann and O. Wagner were absent from the Colony.

5. This fact was communicated by the Liquidators to the Creditors and in particular to a representative of one of the largest creditors of Chs. J. Gaupp & Co., Singapore, who took legal advice on the position. The Liquidators were subsequently informed by this representative that the legal opinion obtained was entirely in the Bank's favour.

6. The Liquidators subsequently took Counsel's opinion as to whether the Agree- ment referred to in paragraph hereof, gave the Bank a valid pledge of the firm's assets, and they were advised that such Agreement not having been drawn up and registered as a Bill of Sale was void, unless the Bauk were able to prove that delivery had been given of the goods in the shop.

7. This aspect of the case was the subject of long interviews and much correspond- ence with the Bank, and a settlement was further delayed by reason of the absence from the Colony of the Sub-Manager of the Bank who had actually carried on the negotiations with Mr. C. F. Heermann leading to the Agreement. Mr. C. F. Heermann hai in the meantime been removed to Australia as a Prisoner of War and his absence was a further factor militating against an early disclosure as to whether or not delivery had been given to the Bank.

8. The liquidation had in the meanwhile progressed satisfactorily in view of which the Liquidators agreed with the Bank's suggestion to allow the matter to remain in abeyance without prejudice to the rights of either of the parties until the liquidation had advanced fur- ther. The question of pooling the assets of Hongkong and Singapore arose about this time and, in view of a possible decision by the Government not to amalgamate the liquid- utions, the Liquidators were of the opinion that the winding-up would, in that event, be completed satisfactorily. A postponement of litigation in these circumstances appeared to the liquidators as likely to result in a considerable saving to the unsecured creditors. The anticipation that the liquidation would be completed without much loss to unsecured creditors was subsequently realised as will be hereafter shown.

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