The Bankruptcy of Lester, Wyllie & Co., 1867

type: Companies - bankruptcy

The Glasgow Herald
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The Bankruptcy of Lester, Wyllie & Co.

Bankruptcy Court – Yesterday, (Before Sheriff Bell)

Examination of Lester, Wyllie & Co. The partners of the bankrupt firm, viz., Wm. Lester, residing at Campsie Junction, and Robert Wyllie, tertius, residing in Glasgow, were crude and paraffin oil manufacturers at Kirkintilloch and Bathgate, and carried on business at Glasgow. Sederant- Mr William M'Kinnon, accountant, trustee; Mr Arthur Alison, writer, agent in the sequestration; and several creditors..

William Lester, one of the bankrupts, deponed- I commenced business about the end of October or beginning of November, 1865, as a crude oil manufacturer at Kirkintilloch. I had commenced to erect works at Kirkintilloch about May, 1865; it was not till the November following I began the manufacture of oil. In the interim – I think about August, 1865 – I acquired right to trial leases of some shale and coal works under the lands of Drumcross and Drumcross Hall, near Bathgate. I contemplated using the produce of these mineral leases in connection with the manufacturing and refining works at Kirkintilloch. I continued to carry on without any partner until February, 1866. Not having been in business to any extent before the time I have mentioned – November, 1865 – I did not keep books or statements enabling me to say what I was worth at any particular time. My money was principally invested in company shares. After I began business I realised these shares just as I required capital to put into the business. My books show what sums were so realised and put in. The amount of these, down at the time Mr Wyllie joined me, is between £9000 and £10,000.

The business proved profitable while I carried it on individually. According to a statement prepared when Mr Wyllie joined there had been a profit made of about £100; and this notwithstanding the business had been carried on at the disadvantage of the works being in an incomplete state. The oil market was during that period in a flourishing condition. It was beginning to droop when Mr Wyllie joined. The terms of my copartnership with Mr Wyllie are expressed in a minute of copartnery. The partnership was for a period of fifteen years, with certain breaks at the option of either party. The capital stock was £22,000 and was to be equally contributed by the partners. My share of the capital consisted of the leases, works, plant, and assets of the business. Mr Wyllie was to contribute his share in cash by certain instalments. I believe he paid in very nearly the whole of his share; the books will show the exact sum. I took nothing to do with the books or financial affairs of the concern from the time Mr Wyllie joined me. He attended to that department, and I to the manufacturing.

About the end of 1866 I became satisfied the business was very unprofitable. In the beginning of 1867, a statement of our affairs was prepared, which showed we were then unable to meet our liabilities. It did not, however, show us to be insolvent, if we could get additional time to pay. It turned out afterwards that the quantity of stock on hand included in that state of affairs had not been overstated. We could not make an exact estimate of the quantity, but merely an approximation. The heavy portion of the oil on hand being covered under ground, we could only roughly estimate the quantity of it by taking into account the crude oil which had come to the works considerably mistaken, and had over estimated the quantity and value. The oil market declined gradually and rapidly from the beginning of the partnership; and, as already stated, in the beginning of 1867 we found ourselves unable to go on unless allowed further time to pay. We submitted our position to our creditors, and on 5th February made an arrangement with them under which they were to be paid in full at six, twelve, and eighteen months. We expected we would be able to meet these instalments. We thought our state of affairs looked well, and that the state of the market would improve. The market instead of improving got gradually much worse, until we saw we had no hope of being able to meet our first instalment. We intimated this to our creditors, and sequestration was resolved on.

In the statement of affairs given up in the sequestration, the works are entered at their prime cost, but I do not think they would now realise anything like the sum set down. The stock on hand would not realise nearly so much as the sum entered in the statement. As showing the great decline in the price of oil, I may mention that when I began business refined oil was sold at 3s per gallon, now it is sold at 9d. Crude oil, for which I got 1s 2d per gallon in the end of 1865, is now sold at 3d or 4d. The immediate cause of our being satisfied we could not meet the first instalment was that we had no money on hand or coming in, and we had discovered the stock on hand had been over estimated to the value of about £6000 or £7000. By our contract of copartnery we were each entitled to draw at the rate of £700 a year. For the year and a half during which the partnership subsisted I drew little more than £300 in all. There is owing to me by the sequestrated firm of James Palmer & Co. a sum of £700, lent to them under the Limited Partnership Act, but which fills to be ranked after the ordinary creditors have been paid. This claim is therefore of no value. The sum was lent to Palmer & Co. within the last 18 months or two years.

Robert Wyllie, tertius, the other bankrupt, concurred in the deposition of Mr Lester. I contributed, he said, upwards of £10,000 towards my share of capital. Besides the firm of Lesters Wyllie & Co., I am interested in two other businesses, one a bread and biscuit manufactory in Glasgow, under the firm of Robert Wyllie, tertius; and the other a similar designation. The partner of the Glasgow business are my brother James and myself. I am interested in it to the extent of four-fifths, and my brother to the extent of one-fifth. The partners in the Lennoxtown business are my brother John and myself; my interest is three-fourths, his one-fourth. There are regular contracts of copartnery applicable to each business. In each provision is made that on the bankruptcy of either partner the solvent partner shall have power to take over the business, and pay out the insolvent's interest in the concern, as that shall be ascertained as at the date of bankruptcy. The bankrupt partner's interest is to be paid by equal instalments at 6, 12, 18, and 24 months from the bankruptcy. Further examination in the sequestration was adjourned till Tuesday, 30th instant, at 12 o'clock.

The Glasgow Herald, 17th July, 1867