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The ongoing court process between the liquidator of Priceclub Operators Ltd and the Priceclub directors will continue 20 October, 2004 and the directors have rebutted claims of wrongful and fraudulent trading, MaltaToday has learned.
The directors of the supermarket chain that crashed spectacularly in 2001 have given lengthy testimony this year and had earlier made a general statement denying responsibility for their businesses collapse before the court.
The Priceclub directors, Victor Zammit, Wallace Fino and Christopher Gauci replied to accusations made in court by the liquidator of Priceclub Operators Ltd and said when they were directors of the company they: “acted correctly and were not responsible for the bankruptcy (falliment) of the company.”
The directors told the court that the company’s insolvency came about despite the directors’ concerned best attempts to save it, and that their behaviour as directors was neither fraudulent nor deceitful.
The directors said they “are not responsible for the debts of the company Priceclub Operators Ltd” and that requests being made by the liquidator are “completely unfounded in fact and at law and should be denied.”
Also before the court the Priceclub directors countered arguments put forward by the liquidator of Priceclub Operators Ltd (the company that ran the supermarkets).
The directors said “all the allegations related to wrongful and fraudulent trading as well as the abuse of privilege are all contested.”
In their testimony the directors explained that: “the allegations being made against Price Club Holdings directly are ones related to a limited abuse of privilege.”
“Those making the case have objected, in the main, that the assets of the Priceclub group were segregated abusively and without justification vis a vis the company’s debts.
“This allegation, as will be shown later on during the court hearings, has no substance in truth. In the first place, the assets in question, which consist in the main of commercial establishments, were financed by the commercial banks, that in the relevant contracts imposed, as normally happens, privileges and hypothecs that make sure the bank is paid before other creditors.
“Moreover one must also consider aspects of a financial nature in the sale of immovable property that require that a group of companies is structured in the way that is being contested in the litigation.
“Finally, it has been shown during the course of the hearings for liquidation that several groups of companies are structured in an analogous way to the Priceclub group.”
In another part of their testimony, the Priceclub directors said “it should be pointed out that the bankruptcy (falliment) came about not because of any bad faith on the part of the directors or shareholders. The creditors were always aware of the situation the company found itself in and for their own reasons decided to continue to do business with Priceclub Operators Ltd.”
The directors explained to the court that before the company crashed, it was obvious to all those doing business with it that there were several companies in the group. “One was ‘holdings’ and another was ‘operators.’ It was clear then that the operators used to run the supermarkets.”
“The structure of the group was clearly in evidence on the website of the Registry of Companies. More than that, the group used to register its accounts with the Registrar of Companies according to law and every director had access to the published accounts.
“Priceclub Operators Limited made available to anybody that was interested in doing business with it all the information necessary to arrive at an informed decision as to whether to continue to do business or not.”
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