Creditors who are owed millions by More Supermarket chain are considering asking a court to place the sole shareholding company under administration, this newspaper has learnt.

The chain used to be partly owned by Ryan Schembri, a meat importer who last month fled the country after being threatened by loan sharks.

Unconfirmed reports said Mr Schembri owed some €40 million to various investors who had been promised high returns.

We had been assured by the holding company that the situation was under control

Although More Supermarkets’ ailing financial situation was fully exposed last week when the Ħamrun outlet had its power supply cut off over pending electricity bills, sources told Times of Malta that alarm bells started ringing three months before.

Between 50 and 60 creditors are involved, but the total amount due has not been verified, sources said.

Creditors who preferred to remain anonymous said that on July 24, a meeting was held at the Malta Association of Credit Management premises in Mosta, after members complained they were not being paid on time.

“Back then we had been assured by the holding company that the situation was under control.

“We were also told that a restructuring process was under way following the transfer of business that saw Mr Schembri’s shares being bought out by D More Holdings, which is owned by Darren Casha,” the creditor said.

More Supermarket in Ħamrun closed last week. Photo: Matthew Mirabelli

Mr Casha outlined his restructuring plan at a meeting last week and yesterday creditors met for a third time to discuss their options.

They were briefed by an auditor and an expert in company law.

Sources who attended the presentation said it was still premature to decide any course of action as the full situation was not yet clear.

The way forward was either to keep the status quo in the hope of a financial turnaround or file a request to place the holding company under the company recovery procedure, as laid down in the Companies Act.

Such a request would have to be backed by creditors representing more than half the value of the money that the company owes.

If the application is upheld, a court-appointed administrator would assume control of D More Holdings, including its property, and examine its financial situation.

His remit would be to verify whether there is a reasonable chance of the company recovering from its situation and becoming a viable going concern.

If, at any time, the administrator feels that it would serve no purpose for the company to continue with the procedure, he would apply to wind up operations.

On the other hand, if there is enough improvement that puts the company in a position to pay its debts, the recovery procedure may be lifted. Experts in company law told this newspaper that creditors would stand a better chance of recouping their money in this way, rather than risk the possibility of liquidation.

In the latter case the company’s assets would be managed by a liquidator vested with the authority to decide in the best interest of the company, within the parameters of its plans to close down.

Any contestations from creditors would have to be decided by the court, the experts said.