Failed travel firm is declared bankrupt

Controversial travel agency Fantasy Tours was yesterday declared bankrupt, with a judge saying the company could not continue after racking up huge losses.

The firm’s financial difficulties first came to light on August 8 when it accepted money from customers booking holidays, only to send an SMS the following day informing them it could not honour the payments.

Fantasy Tours owner Karl Azzopardi and his estranged wife, Audrey, are the sole directors of the company and Mr Azzopardi testified in the proceedings that he initiated to have the company declared bankrupt.

He blamed the business’s downfall on the Malta Competition and Consumer Affairs Authority, which had issued a warning about the company that led to a loss of customers.

The decision declaring the company bankrupt does not open doors for customers to seek compensation through the courts.

Mr Justice Joseph Zammit Mckeon asked Mr Azzopardi why he had taken money from customers when the company was in dire financial straits.

How could he ever face such people again? the judge asked.

Mr Azzopardi said he only took clients’ money because he needed cash to continue operations.

He had hoped that, one way or another, the company would go on.

In his judgment, Mr Zammit Mckeon referred to the financial accounts of the company, noting that it had only made “limited” profit for two years out of the four under scrutiny – 2009 to 2012.

The judge noted that, in the year ending December 31, 2009, the company made a pre-tax loss of €11,810.

The assets amounted to €422,673 and the liabilities stood at €482,410. By the end of the following year, losses before tax reached €42,000 and liabilities rose to €520,343.

At the end of December 2011, the company had a pre-tax profit of €10,468. The assets rose to €594,186 and the liabilities reached €685,517. Borrowings amounted to €387,191.

A year later it had a profit of €14,144, a drop in assets to €365,700 and a drop in liabilities to €495,484.

The liabilities consistently exceeded the assets and the worst year was 2013 when, between January and June, the company made a loss of €228,565.

The judge said he was satisfied that parent company Golden Travel Ltd was not in a position to pay its debts.

The court ordered the dissolution of the company and lawyer Richard Galea Debono was appointed liquidator.

He is expected to file a report within three months.

Lawyers Franco Debono and Mario Camilleri appeared for the customers.