Karl Azzopardi, shareholder of Golden Travel Club Ltd, operator of Fantasy Tours, leaving court yesterday. Photo: Matthew Mirabelli

Unsold block-booked hotel rooms and airline seats were the cause of the financial problems faced by Golden Travel Club Ltd, operators of Fantasy Tours, the company’s lawyer told a judge yesterday.

Lawyer Kris Borg told Mr Justice Joseph Zammit McKeon lack of sales was the root of the problem.

He explained that to keep prices low, the travel agency would block-book hotel rooms and airline seats that would needed be paid for even if the agency could not sell them.

It happened that these rooms and seats were not being sold, with the company incurring heavy losses as a result.

He was replying to the judge’s questions about what had led the company to file for bankruptcy .

It was the first sitting of a case in which the main shareholders of Golden Travel Club Ltd, Karl Azzopardi and his wife Audrey, are calling on the civil court to wind down the company due to its inability to repay its debts. They filed the request on August 8, the same day Fantasy Tours sent text messages to clients informing them that due to financial problems it could not provide their holidays.

Dr Borg told the court that the travel agency would, for example, book 200 hotel rooms and charter a flight for a specific destination but would then only manage to sell 40 of the rooms. But the company would still have to pay for its unsold rooms and seats.

He said that although the firm had tried to maximise its business during the summer months, not many people chose its services.

During the sitting, the judge expressed frustration that although he had appointed the case to be heard yesterday, the company and its lawyer had not come to court with all the documentation.

Dr Borg said he was not yet in possession of the company’s audited accounts and asked to be given two months to be in a position to file them in court.

Mr Justice Zammit McKeon acceded to the request in relation to the audited accounts, which are to cover 2012, but gave the firm a month to submit management accounts for this year.

He also ordered that other sittings be held in the meantime because there were other cases filed before the court that depended on the outcome of this case.

A total of 253 Fantasy Tours clients have filed judicial protests claiming back the money they paid for cancelled holidays.

Bank of Valletta has also filed judicial letters against the travel agent claiming back €115,000 for an outstanding loan.

The case continues in October when Mr Azzopardi, accounts clerk Johann Vella and auditor Paul Marmarà are due to testify.