Vincent Brooks, Day & Son call it a day

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
COMPANIES COURT

NO. 0062 OF 1940

MR. JUSTICE SIMONDS
IN THE MATTER OF VINCENT BROOKS, DAY & SON, LIMITED
AND
IN THE MATTER OF THE COMPANIES ACT, 1229
SUMMARY OF THE STATEMENT OF AFFAIRS
As at 25th January, 1940, the date of the appointment of a receiver for the debenture holder Submitted by Wilfred Vincent Brooks, a director on the 4th day of March 1940

OBSERVATIONS

1. The Winding-up Order was made on 5th February, 1940, upon a creditor’s petition to the Court on 24th January, 1940.

2. The Company was incorporated on 14th May, 1898, under the Companies Acts, 1862 to 1893, with a nominal capital of £10,000 in £1 shares and was formed to acquire and take over as a going concern the business carried on at 48, Parker Street under the style of Vincent Brooks, Day & Son and to carry on the business of printers, lithographers, etc. By special resolution confirmed on 17th June, 1908, the company became a private company.

3. The issued capital is £10,000 consisting of 7,000 shares issued as fully paid and 3,000 shares issued for cash.

4. The Company’s registered office has throughout been at 48, Parker Street, Kingsway, W.C.2. and its business has been conducted from these premises.

5. At the date of the Winding-Up Order the directors of the company were Wilfred Vincent Brooks, who was appointed on 18th August , 1920, Mrs. Marjorie Mary Brooks, who was elected on 25th July 1935, and Douglas John Helme Coulson, who joined the board on 30th January, 1936. The qualifications for directorship was the holding of shares in the Company to the nominal valve of £100.

6. Under the Articles of Association the remuneration of the directors was fixed at the sum of £2. 2. 0 a piece for each attendance at a board meeting. On 26th October, 1922, Wilfred Vincent Brooks and Frederick Allan Brooks were appointed joint managing directors at the salaries of £1000 each per annum after the death of their father, who had been the managing director from September 1898. F. A. Brooks’ appointment as managing director was terminated in October, 1928. He was then engaged as Manager of the photo-litho department at a salary of £750, his brother’s salary being increased to £1250 as sole managing director, with an allowance of £500 for expenses. F. A. Brooks became the assistant managing director in 1928 and in 1930 his salary was again increased to £1,000 per annum. In 1932 the board suspended the assistant managing director as 28th February, 1933, and removed him from that position and from the board. W.V.Brooks has returned himself as a creditor for £2,654. 8. 10 in respect of indrawn salary. Coulson has been the Company’s secretary since 7th January 1932.

7. By an agreement dated 17th May, 1898 between F. G. Bowen (vendor) and the Company, the latter acquired the goodwill and all other assets of the business of Vincent Brooks, Day & Son, which business is said to have started in 1823. The consideration was fixed at £9,880 and was satisfied by the payment of £2,880 in cash and the balance by the allotment to the vendor and his nominees of 7,000 £1 shares in the Company as fully paid.

8. Annual accounts of the business have been prepared and audited regularly. These disclose fluctuating results until 1919 and then a general upward trend in turnover with an average of over £1,000 per annum net profit until 1927. Dividends at the rate of 10% per annum, free of tax, were paid for each of the eight years to 30th June, 1927. Dividends for the four following years were as follows:- 1928, 5%; 1929, 7 ½%; 1930, 10% and 1931, 5%. No dividends were paid after that year. From 1932 to date profits were earned in only two years namely, 1937, £256 and 1938, £551.

9. It appears that the original lease of the premises at 48 Parker Street was surrendered and that a new lease was granted to the Company for a term of 28 years from 29th September, 1902, at a rental of £215 per annum for the first 14 years and £230 per annum for the remainder of the term. During 1920 the Company acquired the freehold of these premises for approximately £5,000. Additions and improvements have been made to the premises from time to time, the balance on the asset account as at 30th June, 1934, being £17,141. 8. 3. In accordance with a valuation obtained on 30th May 1935, the freehold premises account was appreciated to £22,500. On 29thJune, 1939, the Company disposed of the freehold for £21,000 out of which the mortgage debt of £14,425 and various other commitments including a bank overdraft of £5,000 were discharged. The balance of the purchase money was retained by the purchasers against the rent payable under a 44 years lease of the premises which was granted to the Company at an annual rental of £1,450.

10. In January, 1936, the Company agreed to the terms of a resolution passed at a conference of certain creditors under which they were prepared to grant a moratorium of three months from 29th January, 1936, in respect of liabilities as at 31st December, 1935, provided Mr. A. Granville White was appointed financial supervisor and that all the Companies cheques were countersigned by him. The moratorium was extended from time to time in order to give the Company an opportunity of finding new working capital. Several financial schemes were arranged but they could not be satisfactorily completed. Eventually the Company entered into negotiations for obtaining an advance of £7,000. Pending completion of these negotiations overdraft facilities were arranged on the understanding that the overdraft would be discharged immediately the advance was received by the Company.

11. On 29th June, 1939, the Company issued a debenture charging its undertaking and all other property and assets with the payment of all moneys due or to become due to the Bank.

12. W. V. Brooks states that the returns of sales for the last three months of the year 1939 did not average more than £600 a month as against a normal turnover of £1,400 or £1,500 a month; that the Company had practically no orders on hand for January and that, therefore, he decided not to accept the advance.

13. On 10th October, 1939, a creditor for £186. 3. 1 obtained judgment against the Company in that sum and costs. Leave to proceed to the enforcement of the judgment was suspended provided the Company paid a sum of £50 within 4 days of the Order and the balance by installments of £50 a month. The Company paid £50 on 21st November, 1939, but the cheque for the second installment was dishonored on presentation. No further payment was made by the Company and the creditor presented the petition on which the Winding-Up Order was made. In the meantime, on 25th January, 1940 the debenture holder appointed Mr. A. Granville White of 73, Cheapside, E.C. as Receiver.

14. W. V. Brooks and Coulson attribute the failure to the outbreak of the war.

15. The Receiver for the debenture holder is continuing the business in the hopes of disposing of it as a going concern, but he states that having regard to the specialised and somewhat ancient type of plant he doubts whether the assets will realise sufficient to discharge the debenture liability, particularly bearing in mind the somewhat heavy claims of the preferential creditors.

16. As a result of the statutory meetings of creditors and contributories held on 14th March, 1940, the Official Receiver remains the Liquidator of the Company.

Dated this 24th day of June 1940

H. P. Naunton,
Official Receiver.

33, Carey Street,
Lincoln’s Inn,
London, W.C.2.