772 



H irn C U L T U E E 



December 11, 1915 



WHEN A DEBTOR OFFERS LESS 

 THAN 100 PER CENT. 



I feel like emphasizing in this 

 article the importance of a fight 

 which the National Credit Men's As- 

 sociation is making to induce cred- 

 itors to act a little more stiff-backed 

 in considering offers of settlement 

 from embarrassed debtors. The as- 

 sociation contends that a constant 

 series of bad frauds are being perpe- 

 trated by alleged bankrupts or finan- 

 cially embarrassed business people, 

 right under the noses of their cred- 

 itors, merely because the latter are 

 too ready to accept almost any offer 

 that Is made. 



In writing on the subject the asso- 

 ciation says: — 



When a business man becomes flnan- 

 cially embarrassed, and offers a certain 

 percentage in settlement, if a creditor 

 holds back and besins to show signs of 

 wanting to know a little about the case, 

 the reply is apt to bo to the effect that 

 be is the only creditor who hasn't come 

 in, that be is showing a very uncooperative 

 spirit, or else there is a hint that he is 

 holding out for a preferential payment. 

 The idea clearl.v is to stampede the creil- 

 itor into an acceptance of the offer 

 through sharp criticism to the effect that 

 he is playing the part of an obstructionist. 

 To such tactics most creditors are weak- 

 kneed enough to capitulate. 



The association cites a case where 

 a debtor, as late as last .January, gave 

 his creditors a statement of assets 

 and liabilities which showed owner- 

 ship of two pieces of valuable real 

 estate. A few months later, this man 

 sent out notices to his creditors that 

 he was financially embarrasseil and 

 offered a certain percentage in com- 

 promise. He accompanied it with a 

 statement of assets and liabilities, but 

 the former this time contained no 

 real estate. One of the creditors 

 wanted to know where it had gone, 

 but the other creditors cried him 

 down because he was threatening a 

 fight which would tie the thing up, 

 eat up the funds, and delay settle- 

 ment. He persisted for a little, but 

 was finally overborne, and the niys- 

 tery of the missing real estate was 

 never solved. Very likely it had been 

 manipulated in some way which 

 would not have stood the test of an 

 investigation — if only some one had 

 been man enough to make it. Had 

 it been recovered, the percentage of 

 settlement would have been about 

 doubled, but the creditors believed 

 the bird in the hand to be worth the 

 two in the bush. 



If a few more creditors would be 

 slower to accept the first offer of 

 settlement made them by embar- 

 rassed debtors, bankruptcy and in- 

 solvent business frauds would proba- 



bly be reduced one-half in a very 

 short while. Debtors have grown 

 astonishingly bold, so confident are 

 they that creditors will gladly and 

 gratefully take whatever is offered 

 them and ask no questions. 



Let me cite a few cases from my 

 own experience, and from the records, 

 to show how this works: — 



A retail hardware dealer became 

 embarrassed and called a meeting of 

 his creditors. His assets were about 

 $«.000 and his liabilities over $12,000. 

 The assets had to be scaled down be- 

 cause book accounts were a part of 

 them. The hardware dealer offered 

 35 per cent, in full, payable in cash. 

 Practically all the creditors favored 

 taking it, after the manner of credi- 

 tors. One fairly large creditor held 

 off and the bankrupt began to talk 

 about going into bankruptcy, and the 

 expense and the fees of that, and so 

 on. until the other creditors actually 

 began to get indignant at the ob- 

 structionist, as they considered him. 

 He persisted, however, and to make 

 a long story short, the investigation 

 that ensued unearthed the fact that 

 the hardware dealer owned a share in 

 a prosperous hotel business, which, 

 of course by oversight he had neglect- 

 ed to list among his assets. The per- 

 centage of settlement was finally 55 

 per cent, instead of 35. 



In another case a wholesale grocer 

 offered his creditors 50 per cent, pro- 

 fessing that in order to offer even 

 that, he had had to liorrow from his 

 wife. It would have gone through 

 with a rush had not two of the credi- 

 tors been a little suspicious. They 

 insisted on being shown and finally 

 the wholesale grocer was compelled 

 to admit that he. or somebody for him 

 — the thinnest kind of a subterfuge 

 had been used — held a block of stock 

 in a chain of retail stores. Wlien 

 these were added to his assets the 

 man proved to be solvent and he 

 promptly arranged to pay in full. 

 Two creditors out of about forty were 

 all that had the courage of their con- 

 victions here. The rest were so 

 afraid something would happen to 

 reduce the 50 per cent, they had been 

 offered, that they were very im- 

 patient with the two who stood out. 



In a third case, one creditor out of 

 quite a number insisted that the item 

 of "stock on hand" which a debtor 

 had included in a statement on which 

 he based an offer of 40 ])er cent., was 

 suspiciously small. He presented 

 reasons for his opinion, but the other 

 creditors were practically all anxious 

 to accept the 40 per cent, and get out. 

 As in the other cases, they looked on 

 the one man who held out as an 

 enemy. The one man persisted, how- 

 ever, and finally made the debtor dis- 

 gorge $4,000 of goods which he had 

 "sold" to another man. 



There are quite a number of such 

 cases, but cases which don't happen 

 in this way are of course much more 

 numerous. I heard a bankruptcy 



lawyer not long ago offer to lay a 

 wager that he could induce the credi- 

 tors of any insolvent debtor to accept 

 settlement of around 50 per cent. 

 merely by writing one letter. Per- 

 haps it was exaggerated, but not nec- 

 essarily a great deal. In most cases 

 1 have no doubt it could easily be 

 done. 



The creditor when offered a per- 

 centage settlement by a debtor, should 

 not be too quick to accept. It is re- 

 markable how many such offers are 

 increased merely by creditors holding 

 oft'. It will be a service not only to 

 one's self, but to the whole cause of 

 commercial honesty, if a creditor will 

 insist on being shown before he ac- 

 cepts any offer of less than 100 per 

 cent. 



(Copyright, October, 1915, by 

 Elton J, Buckley.) 



Obituary 



James Hynes. 



James Hynes, 50 years, for the past 

 15 years florist and gardener for the 

 Houghton estate, North Adams, Mass., 

 died December 1st, after a long illness. 

 He leaves a widow and nine children. 



Edward F. Skahan. 



Edward F. Skahan, market gardener, 

 died at his home in Belmont, Mass.. 

 Dec. 1st. He was 50 years of age. A 

 widow and eight children survive him. 



Mrs. Gertrude Brinton. 



Mrs. Gertrude Brinton, wife of Mau- 

 rice J. Brinton, a leading florist of 

 Christiana, Pa., died on December 4. 

 Death was the result of a complication 

 of diseases and after an illness extend- 

 ing over several months. She was the 

 daughter of the late Henry Rakestraw. 

 Chester county, and a graduate of the 

 West Chester Normal School, a mem- 

 ber of the Friends' Church and a wom- 

 an who will be deeply missed in her 

 community, having been active in any 

 matter pertaining to the welfare of her 

 home town. A devoted wife, a loving 

 mother and a woman who was of in- 

 calculable help to her husband in his 

 business, the florists of Lancaster Coun- 

 ty all extend their sympathy to Mr. 

 Brinton and his two children, Grace 

 and Maurice, Jr. She is also survived 

 by her mother, Mrs. Jennie Rakestraw 

 and two married sisters. The funeral 

 services were held Monday, Dec. 6th, 

 with a profusion of the flowers she 

 loved so well. A. M. H. 



W. ATLEE BURPEE. 



(Died at Fordhook Farms, Nov. 26.) 

 How fittingly this man's life closes. 



That like blown petals on the grass 

 In this sere time of summer's roses 



He, too, should pass! 



Light be the churchyard loam above 

 him 

 And sweet the Spring that he shall 

 know! 

 There shall God's blossoms lean to 

 love him, 

 ■Who loved them so. 

 — Tom Daly in Phila. Ledger, Nov. 

 27, 1915. 



