Liquidators reject creditors` allegations

The two liquidators of Paola Motors Ltd, the former Daewoo Malta Ltd, filed a counter-protest in the First Hall of the Civil Court replying to the judicial protest filed against them by Joseph and Carmen Gaffarena.

The couple claimed the liquidators had failed to hand over to the company`s creditors a detailed statement of the company`s affairs.

The liquidators, Dr Andrew Chetcuti Ganado and Raphael Aloisio, said they had summoned a creditors` meeting in accordance with the Companies Act within three months from the anniversary of the company`s winding up. At the meeting, held on February 8, the liquidators presented a detailed statement of their work for the period from November 23, 2000 to December 31, 2001. The statement contained information about the company`s income and expenditure for that period.

Dr Chetcuti Ganado and Aloisio said the presentation of the report was oral and also visual, through screening of the material, and full details of all the liquidators` activities had been given to the creditors.

They said that in terms of the Companies Act they were bound to provide the Registrar of Companies with a declaration about their work and the progress that had been registered. This declaration was not necessarily the presentation made to the company`s creditors.

To date, they added, the Registrar of Companies had not yet informed them as to the form their declaration was to take. Any delays in submitting this declaration were therefore due to reasons beyond their control and was not caused by some omission on their part.

The Gaffarenas` lawyer had attended the creditors` meeting and was given every opportunity, together with all the other creditors, to take note of the details presented by the liquidators and to question them on their operations.

The liquidators therefore denied they had acted in violation of the law. They also denied they had failed to submit the declaration to the Registrar of Companies in order to improve the position of one particular creditor. They said this allegation was totally unfounded and irresponsible.

The appointment of Dr Chetcuti Ganado as a liquidator of the company was transparent and had been confirmed in the first creditors` meeting in November 2000. Dr Chetcuti Ganado was a lawyer who worked in the legal office of Bank of Valletta plc and this was a fact known to all of the creditors. There was nothing incorrect about his appointment and the two liquidators said it was normal for a liquidation to have some connection with a particular creditor.

The two liquidators denied they had decided not to investigate the cause of the financial collapse of the company. In the course of the creditors` meeting, the liquidators had explained the dilemma facing every liquidator to the creditors. This consisted in the fact that such investigations required time and expense and these would be deducted from the funds that could be split among the various creditors. No one could predict the result nor the cost of such an investigation. This was explained to the creditors and the liquidators had reserved the possibility of proceeding to such an investigation after further consultations with the creditors.

Dr Chetcuti Ganado and Aloisio rejected the Gaffarenas` allegations.

Dr Paul Pullicino signed the counter-protest.