Price Club creditors meeting today to appoint liquidator

Price Club creditors are set to meet today after the court authorised PricewaterhouseCoopers to call a meeting for creditors to appoint a liquidator.

The supermarket chain went out of business last year after it was unable to pay heavy debts it had run up. A creditors' committee was formed and PricewaterhouseCoopers was appointed as consultants and a plan to save Price Club was drawn up.

After lengthy negotiations and several attempts to find ways to inject cash into the company failed, creditors last November filed an application requesting the court to appoint a liquidator to liquidate the Price Club Group as it was insolvent. The creditors, about 100, claimed they were owed a total of Lm8.3 million.

The amount of money owed to individual creditors varies from a few hundred liri to close to Lm1 million. Creditors hope that whoever is appointed liquidator will sue the Price Club directors personally.

A spokesman for PricewaterhouseCoopers said when contacted that creditors would vote to appoint the liquidator. The court would be informed of the identity of the liquidator at the next sitting on June 25. If the court approves the nominee, he would then be appointed officially.

In the meantime, Price Club (Swatar) Ltd, which owns the supermarket building at Swatar, is also facing a legal battle after HSBC asked the court to auction the building, valued at Lm2.8 million.

The auction has been set by the Civil Court for July 4.

The bank filed its case against Price Club in view of the hypothec it had over the company's assets.

The action by the bank had drawn criticism from some of the creditors who complained that banks should not be given first preference, as they had to take into consideration the commercial risk they were facing when they loaned money, just as companies did when they allowed companies to run up credit.

The Price Club group is made up of Price Club Holdings Ltd and Price Club Operators Ltd.

Price Club Holdings Ltd in turn owns Price Club Operators Ltd, Price Club (Birkirkara) Ltd, Price Club (Burmarrad) Ltd and Price Club (Swatar) Ltd.