Bankrupt? Not to worry! Just register as a political party, that’s all...

It is, in a nutshell, still a ’multi-million-euro size hole’ that has been punched into the local economy: no doubt, to the detriment of countless other impacted commercial entities, further down the supply-chain...

Funny thing, this whole ‘bankruptcy’ business. Just this morning, for instance, there were three stories on that subject: all placed neatly side by side, on this very newspaper’s portal. So... let’s take a look at them one by one, shall we?

In chronological order, the first was about the recent arrest and trial of Ryan Schembri: one of the former owners of the now-defunct ‘More Supermarkets’ chain, who had previously fled the county after amassing debts of around €40 million.

As for the other two: well, you’ve probably guessed already. One was about Bernard Grech’s candid admission, on TV this week, that the Nationalist Party owes a tidy ‘€32 million’ (that is to say, only eight million less than the amount owed by Schembri);

... and the other centred on a very helpful suggestion by Pierre Portelli – who, as former head of its media empire, should know a thing or two about the PN’s financial situation – that the party should ‘go into forced liquidation’.

Hmmm. Now personally, I’ve always interpreted the word ‘forced’ to imply that the decision itself is generally ‘taken on your behalf by others’ (and usually, without you being particularly ‘thrilled’ by the prospect, either)... and in this particular instance, those ‘others’ might include a court-appointed liquidator, etc.., etc.

But like I said earlier: one step at a time. So back to Ryan Schembri, for now.

I imagine you probably won’t need much reminding about this particular case – it was, after all, the single most calamitous financial crash this country had experienced, since the ‘PriceClub’ affair of the early 2000s - but suffice it to say that ‘More Supermarkets’ had clearly bitten off a good deal ‘more’ (ahem) than it could actually chew.

As the same article notes: “[Schembri] is believed to have borrowed large sums of money from entrepreneurs, before finding he was unable to pay back the loans.” The upshot was that he ended up being pursued by over 50 rather pissed-off creditors... with the result that: a) he himself had to go into hiding overseas, and; b) the holding company eventually suffered the fate described by Pierre Portelli, above (and not, I might add, on its own initiative).

Having said all this, though: the latest twist seems to have less to do with the above background story, than with the various other criminal charges Schembri now faces separately in court (which also extend to ‘fraud’, ‘forgery’, ‘money-laundering’, etc.)

But still: the entire sequence of events, leading to Schembri’s arrest, can all be traced directly to the financial woes of his former supermarket chain, around eight years ago or more.

And if you interpret it as a ‘cautionary tale’ on the same subject... the moral seems to be that there are (or should be, anyway) rather serious consequences, to be faced by anyone amassing that kind of unpayable debt.

Not just for the defaulters themselves, by the way (even though, if convicted, Schembri does face a rather long time in jail.) Because, at the risk of a small generalisation: that sort of thing has a tendency to affect quite a few other people out there too, you know. And in the case of More Supermarkets: we can even name some of those ‘other people’, as well as quantify some of their individual losses.

In 2014, for instance, this newspaper reported that: “[More’s] creditors include Prime Trading Ltd, owed €8,000; Agdel Ltd who are owed €380,000; entrepreneur Alexander Farrugia who is owed €1.5 million; and Edmond Mugliette who is owed a whopping €2 million by the company. Joseph Vella, the owner of the former Ta’ Natu Supermarket in Mosta, sued the company earlier this year after it failed to pay €32,000 in energy bills and €187,700 in unpaid rent. Cint Operations Ltd had also called in a €560,000 loan...”

And that’s a just a small sample, of an entire trail of other companies that had similarly ‘lost their asses’ in the More Supermarkets crash of 2014. So to come back to our little cautionary tale: it is not so much that... well, that Shakespeare (as usual) had a point, all along, when he advised us to: “Neither a lender, nor a borrower, be...”

No, it’s also that bankruptcy – in this case, on a scale which punched a whopping ‘€40-million-size hole’ into our economy, no less – can (and usually does) have a rather glaring knock-on effect, right across the entire spectrum of economic activity.

From this perspective, More Supermarkets might not even the best example. For while the amounts involved were certainly a lot smaller (only Lm8 million; or around twice that much in euros), the collapse of PriceClub, around a decade earlier, was arguably far more financially devastating, in its day.

In 2014, economist George Mangion had even estimated that “the impact of the collapse of the PriceClub on the island’s business community is probably equal to, or could even be in excess of that of the possible impact of the Tesco scandal.” (Note: a scandal which not only wiped €2.9 billion off the value of the Britain’s most famous retail giant; but which also implied ‘huge losses for pension funds ̧ traders ̧ small investors and thousands of employees who hold the shares...”)

BUT... like I said at the very beginning: bankruptcy is a funny old thing, really. So funny, in fact, that if you were to apply the same ‘cautionary tale’ approach to those other two stories I mentioned... you might well end up reaching the clean opposite conclusion.

OK: I’ll keep this part brief, because the point has largely been made already (not just in this article; but in several others I’ve written on the same subject over the years).

Truth be told, we didn’t even need the juxtaposition of those three articles, to illustrate how there are clearly two sets of different weights and measures, when it comes to bankruptcy in this country.

For instance: for a purely commercial entity, the consequences of involvement in debt (be it as a ‘borrower’, or a ‘lender’) are almost certainly going to be... well, serious. And not just for multi-million-euro ventures like ‘More’ or PriceClub’, by the way: because as far as I know, the Company Act applies to pretty much any registered business on the entire island (including, I might add, the two parties’ commercial media organisations...).

In legal terms, what that law actually envisages includes things like ‘forced liquidation’ (and as a general rule: not because you ‘suggested it yourself’). And, if there are any ‘properties’ or ‘other assets’ to be sold off -or otherwise ‘stripped’ – in that process... they will certainly not be chosen by the debtor himself (as Bernard Grech seems to be suggesting, with his idea to just ‘sell off a few kazini, here and there’.)

Meanwhile, there may be other, far worse repercussions. You might be hauled to court by as many as 50 separate creditors, at once; wou might – like Schembri was - be chased into exile by an angry, pitch-fork-wielding mob; or, if you are unwise enough to approach the wrong people for ‘assistance’... you might even end up at the bottom of the sea, with both your feet encased in cement...

If, on the other hand, you happen to be a political party, facing exactly the same predicament (and owing roughly the same amount, too!)... well, it seems you are not only perfectly free to rack up debts of over €30 million, without ever even getting to see the inside of a courtroom (still less, a prison-cell)... but the chances are, those debts will probably never even be called in at all!

And in fact, it is precisely this aspect – far more than the ‘double-standards’ (which, let’s face it, we all knew about anyway) - that puzzles me most, in all this. Going over those company names in that list again – and it’s hardly a coincidence, by the way, that ‘Ta Natu in Mosta’ is described as a ‘former supermarket’ – will give you a rough idea of the type of businesses that actually bore the brunt of the More Supermarkets collapse, eight years ago (and unsurprisingly, it consists in various levels of the ‘supplier/distributor’ network chain).

So the question, I suppose, becomes: who’s actually bearing the brunt of the PN’s colossal €32 million debt? To whom is all this money even owed, anyway: given that, a) they must be pretty darn rich, to be able to so easily afford to dispense with literally millions of euros, in unclaimed dues... and, b) I’m not seeing much evidence of companies and/or other commercial entities, facing the same sort of consequences as the victims of those other bankruptcy cases I mentioned... despite having similarly pumped so much money, into what is effectively a bottomless pit of debt. Are you?

And OK: I could ask pretty much the same question about Labour’s debt, too. For while the amount owed may be slightly less – but then again, it may not (who knows, really?) – well, it’s still money that remains owed, and unpaid, to SOMEBODY out there...

It is, in a nutshell, still a ’multi-million-euro size hole’ that has been punched into the local economy: no doubt, to the detriment of countless other impacted commercial entities, further down the supply-chain...

Yet where the ‘hole’ punched by More Supermarkets (and PriceClub before it) had sent shockwaves throughout the entire economy ... this one seems to have had no discernible ‘knock-on effect’ at all.

And I don’t know about you, but... as far as I can see, something doesn’t quite add up.