Court establishes Price Club creditors' ranking

A court today determined the order in which creditors of a former director of Price Club Operators Limited and Biochemicals Limited were to rank in preference.

HSBC Bank Malta plc had told the court that it had deposited 1,001,630.57 euros in court following the judicial sale by auction of property belonging to Mr Zammit. The Commissioners of Value Added Tax and of Inland Revenue, together with the Registrar of Court objected to the withdrawal of these funds by HSBC on the basis that they too had claims against Mr and Mrs Zammit.

The court was, therefore, requested to establish the order in which the various creditors would rank in this case.

The court heard that HSBC was owed 3,316,812.84 euros from Victor Zammit in his capacity as guarantor of Biochemicals Limited. The Commissioner of VAT declared that the department was owed 684,022.19 euros by Mr Zammit while the Commissioner of Inland Revenue claimed that his department was owed 931,162.35 euros. The Registrar of Court also claimed payment of 445.28 euros being the court expenses for the judicial sale by auction.

After examining the case law governing ranking of creditors Mr Justice Lino Farrugia Sacco ruled that the first preference creditor was the Court Registrar.

This official was followed in order of preference by the Commissioner of VAT and by the director of Social Security.

As the amount deposited in court had been exhausted the court ruled that it would not establish any further ranking of creditors.