Some people and businesses owed money by the defunct Sea Malta could end up empty handed, creditors of the former national commercial shipping line were told by liquidators.
At a meeting for creditors yesterday, the liquidators said the courts would decide on a list of privileged creditors, which included Bank of Valletta, the VAT Department, the Malta Maritime Authority, Malta Shipyards and the sea-based employees.
Only after these are paid - and they are expected to leave very little - will the claims by the so-called ordinary creditors be considered.
The liquidators' legal adviser, Ian Refalo, said it was only a matter of months now before the courts would conclude their assessment and draw up a rank order of privileged creditors. The ranking would determine who gets paid first.
A supplier who falls in the category of ordinary creditors and who is owed thousands of euros said he gave up hoping he would ever receive "one cent" at the end of the process. "If ever I receive a cheque at the end of this process I will consider it a bonus," he said.
Seafarers had filed two separate court cases claiming privileged rights for just over €2.3 million owed to them by way of notice money and redundancy payments. The court rejected their claims.
The Commissioner of VAT was claiming €684,000 in VAT due and interest accrued, the Malta Maritime Authority was claiming just under €1.8 million and Malta Shipyards a total of €876,000 for repair works on one of the company's ships.
Most of yesterday's meeting was dominated by seafarers who asked questions on the payment of their redundancy money.
It was explained by the liquidators that notice money was privileged according to employment law but Mimcol (the government holding company) was awaiting legal advice from the Attorney General on other aspects of the seafarers' claims. Seafarers said it was unacceptable that the Attorney General took a whole year to give his advice.
Money due to shore-based employees had already been paid out by the government. The payments were not made from the liquidation money.
The company's two largest assets, its ships, were sold in 2006. MV Maltese Falcon was sold in June 2006 for €4 million and the MV Żebbuġ was sold in October 2006 for €1.42 million. The funds were being held by the court.
According to the update report, surplus funds held by the liquidators amounted to €8.1 million after court fees and other moneys owed to the liquidators were deducted.
The government had embarked on the privatisation of Sea Malta in 2005 but the talks with the Italian company Grimaldi, which was interested in the bid, faltered after sea-based employees objected to the conditions on offer.
Sailors continued objecting to the conditions offered by Grimaldi even after the government had signed a preliminary agreement with the Italian company. At that stage the process was abandoned and the government declared Sea Malta bankrupt.
At the time the national sea company had accumulated losses that amounted to €10.9 million.
Eventually, the routes operated by Sea Malta, deemed to be a public service obligation, were offered to the subsidiary company set up by Grimaldi, Malta Motorways of the Sea.
The new foreign-owned company received €350,000 a year in line with the PSO agreement.