§ MR. T. GIBSON BOWLES
I beg to ask the President of the Board of Trade whether it has been, and is, the general practice of the Official Receivers of the Board of Trade, when winding up companies under the Act of 1890, to wind them up by carrying them on, and to borrow money for that purpose, and, in particular, whether the Official Receiver acting with regard to the Jabez Balfour Group of Companies has borrowed £300,000, in order to expend it in carrying on the Salisbury Street property; and whether he will state the total amount of the sums borrowed by Official Receivers in connection with the Balfour Group of Companies, and the rates of interest paid thereon?
§ MR. BRYCE
It is not the general practice of the Official Receivers when winding up companies to carry on the business, or to borrow moneys for that purpose; on the contrary, it is their general practice to realise and distribute assets as speedily as possible. But in certain cases, where an immediate forced realisation would be disastrous to the interests of the shareholders or creditors, or both, Official Receivers, when acting as liquidators, and when so desired by the Committee of Inspection or under the sanction of the Court, have carried on the business, and have in the name of the company borrowed moneys in order to protect the assets from a forced realisation. But such moneys are borrowed solely on the security of the assets of the company, and without any liability on the part of the Official Receiver or the State. In the particular group of cases referred to by the hon. Member the Official Receiver has borrowed various moneys from time to time, amounting collectively to about £1,280,000, the amount outstanding at the present date being £813,000. Interest is paid at the rate of 6 per cent, per annum, and there is to be a commission of 10 per cent, upon any surplus ultimately available for distribution among the unsecured 1541 creditors or contributories. The money has been borrowed solely on the security of the assets of the various companies, and for the purpose partly of completing properties and rendering them market able, and partly of paying off prior mortgagees, who were threatening an immediate sale or foreclosure, and some of whom were receiving interest at the rate of 16 per cent, per annum. These transactions have been entered into only at the express desire of the Committee of Inspection, and after approval by the Court. The Official Receiver is himself of opinion that if this course had not been adopted, and if the properties had been left to be realised by the mortgagees, there would have been no surplus available for the unsecured creditors.