D More Holdings, which owns the debt-ridden More Supermarkets chain, is facing liquidation after an attempt to place the company under administration failed, The Sunday Times of Malta has learnt.
According to the Companies Act, once a company is declared insolvent its assets would be managed by a liquidator who has authority to decide on the claims filed by the creditors. However, should any creditor disagree with the liquidator’s decision, the only option is to go to court.
Experts in company law told this newspaper that this did not bode well for some 50 creditors, who are owed millions by the insolvent supermarket chain. They added that creditors stood a better chance of recouping their money if the company had been placed under a court-appointed administrator.
Under the Companies Act, companies in this situation go into administration, where its books are examined to determine if there is a reasonable chance of a financial turnaround.
Such an option no longer exists as an application filed by D More Holdings last October was turned down. The court said that there was no recovery plan in place and so the company’s financial position was deemed as irreversible.
Sources close to D More Holdings told this newspaper that the company lawyers were finalising its dissolution which should be formally announced “in the coming days”.
“The debt accumulated by Cassar and Schembri Marketing Limited on the leasing agreements to acquire the various supermarket outlets made the company insolvent,” a source added.
Up to some months ago More Supermarkets was partly owned by Ryan Schembri, co-owner and director of Cassar and Schembri (Marketing), who fled the country in September after allegedly being threatened by loan sharks.
Unconfirmed reports said Mr Schembri owed some €40 million to various investors who had been promised high returns.
Last May, Mr Schembri was bought out by Darren Casha of D More Holdings, who became the sole shareholder of the chain.
However, the business soon ran into financial trouble. The Ħamrun outlet has been “temporarily” closed since October 14, when Enemalta cut off power over a pending €50,000 bill. It later transpired that the company had also accumulated €250,000 in unpaid rent for the Ħamrun outlet alone.
Meanwhile the Mosta outlet has been rebranded as Your Supermarket, and is now being run by MZ Supermarket Mosta Limited while the rest of the More Supermarket outlets have closed down.
This company was set up days after the closure of the Ħamrun outlet, and its sole director and shareholder is Mark Zammit. More Supermarket owner Darren Casha was initially involved in the setting up of this company as he was co-director with Mr Zammit as well as company secretary. However his involvement only last five days, as on October 25 he resigned from both posts.
“The reason for my decision to quit so early was that I had different views from Mr Zammit, and since he was the sole shareholder I was the one who had to make way,” Mr Casha said yesterday when contacted by this newspaper. However he declined to comment on the future of the More Supermarkets chain.