A judge has ordered the winding up of Daniels shopping complex in Ħamrun after declaring it insolvent.
Legal action was taken against the owners of the complex in 2014 by one of its creditors, Panta Contracting Ltd, over an outstanding debt of €1.5 million.
The court heard that, apart from the debt with Panta Contracting, the company responsible for the shopping complex, D.A. Holdings, had several other creditors, who were owed over €12 million plus interest.
Panta Contracting argued that D.A. Holdings was in a state of insolvency and only appeared solvent on paper due to a €20 million revaluation of its properties in 2012, the last time the company filed its accounts.
Manuel Castagna, a partner at the company’s auditors, Nexia BT, told the court the company did not have enough money to pay its creditors on time. He said the only way creditors could be paid was through the sale of the company’s properties or a fresh capital injection.
The shopping complex had reached a point of no return
The value of the company’s properties in 2012 was based on their fair value rather than their cost.
Mr Castagna told the court that the company’s accounts for 2013 and 2014 had not yet been completed.
The court was told that Nexia BT had requested a revaluation of the company’s properties because its circumstances had changed in light of legal proceedings against it, which raised the likelihood of the properties being sold by court order.
Company director Steven Delicata told the court the shopping complex lost around half a million owed to them by the operators of More supermarkets. The former boss of More supermarkets, Ryan Schembri, fled the country in 2014 leaving behind millions in debts.
One of Mr Schembri’s companies, Cassar and Schembri Marketing Limited, was dissolved last year by court order after upholding requests by two of its many creditors who are owed an estimated €2 million.
The company went in the red while operating the debt-ridden More Supermarkets chain as it was unable to keep up with its debts.
Lawyer Richard Galea Debono, who was appointed as a provisional administrator, told the court More supermarket used to attract many people to the shopping complex. He said the supermarket closed down for reasons unrelated to the shopping complex itself.
Since the supermarket closure, the monthly rent from other operators within the complex amounted to between €8,000 and €10,000, which was barely enough to cover its day-to-day running costs, Dr Galea Debono said.
The company went in the red while operating the debt-ridden More Supermarkets chain
In its judgment, the court decided that the shopping complex had reached “a point of no return” as it did not have enough income to pay its debts.
The eventual sale of the company’s assets to pay its debts would no longer allow it to operate as a business, therefore, its dissolution and winding up was “inevitable”, the court found.
Mr Justice Joseph Zammit McKeon ordered the dissolution of the company.
Dr Galea Debono was appointed as the company’s liquidator. A verification of the company’s assets will take place and a report will be presented on June 16.
The company was ordered to pay all court and liquidation expenses.