Court sets creditor ranking list in Price Club saga

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

The judgment was delivered by Mr Justice Lino Farrugia Sacco, sitting in the First Hall of the Civil Court.

HSBC Bank Malta plc told the court it had deposited €1,001,630.57 in court following the judicial sale by auction of property belonging to Victor Zammit.

The Commissioners of Value Added Tax and of Inland Revenue, together with the Registrar of Court, objected to the withdrawal of the funds by HSBC on the basis that they too had claims against Mr Zammit and his wife, Rose.

The court was, therefore, asked 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 from Mr Zammit in his capacity as guarantor of Biochemicals Ltd. The VAT Commissioner declared that the department was owed €684,022.19 by Mr Zammit and the Commissioner of Inland Revenue claimed that his department was owed €931,162.35.

The Court Registrar said €445.28 were due to him, being the court expenses for the judicial sale by auction.

After examining case law governing ranking of creditors, the court ruled that the first preference creditor was the Court Registrar. He 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 it would not establish any further ranking of creditors.