Fantasy Tours is officially declared 'bankrupt'

The First Hall of the Civil Courts has dissolved Golden Travel Club Ltd declaring the company bankrupt and in liquidation.

The company operated the travel agency ‘Fantasy Tours’, however the company sought a declaration of bankruptcy after cancelling clients' holidays through an SMS on 7 August 2013.

The SMS informed the clients that the company had closed down and that their holidays planned through Fantasy Tours could not materialise. The previous day, on 6 August, the company director had phoned his outlets telling staff not to take more bookings.

On 8 August 2013, the shareholders claimed that all efforts by the company to maximise sales during the summer proved futile. The lack of sales landed Golden Travel Club Ltd in an untenable position making it impossible for the company to pay its dues.

The owners, Karl Azzopardi and his wife Audrey, requested the court to declare their company bankrupt and in liquidation. They explained how they had put all available investment towards the company however there was no hope for recovery.

Taking the witness stand, auditor Paul Marmara informed the court that even if someone injected a vast sum of capital in Golden Travel Club, the company would still have floundered as it was beyond rescue.

“The blame lay with the company's insistence on selling tours to Corfu even though clients said they would not book because of a warning issued by the Consumer Affairs Authority against Fantasy Tours,” he said.

Azzopardi had taken upon himself commitments with airlines and hotels that had to be honoured even if the tours were not sold. Corfu tours generated a total income of €53,900 but expenditure added up to €140,000, leaving the company with a loss of €38,000. In 2013 the company’s expenses totalled €195,000.

Choosing to give evidence in his own case, Karl Azzopardi reiterated that he would have paid any price to save his company, a belief which cost him his self esteem, his public image and hundreds of thousands of his personal fortune. Azzopardi claimed that he had even refrained from cashing his salary cheques for a number of months.  "I approached Mondial Travel and Britannia Tours. I even had a foreign investor interested in a merger, but they all turned me down," the bankrupt director said.

Mr Justice Joseph Zammit McKeon stated that a company is insolvent if its liabilities exceed its assets. In the case of Golden Travel Club Ltd the company’s share capital has been completely paid up. While the company could resort to getting its working capital through a loan, this is very unlikely given the large negative exposure the company experienced. Furthermore, the company’s assets were not sufficient to mitigate its debts.

Court documents show that at end of 2009, the company registered a loss of €11,810. Company assets totalled €422,673 while its liabilities reached €482,410.

A year later losses went up to €42,062. Assets plummeted to  €418,544 but liabilities stood at €520,343.

2011 saw a pre-tax profit of €10,468. Assets were raised to €594,186 but liabilities rocketed to €685,517.

In 2012 the company again registered a marginal profit of  €14,144 but both assets and liabilities went down to  €365,700 and €495,484 respectively. The company reached its final hurdle in 2013, when in the first six months losses had reached  €228,565.

Judge McKeon held that the company was not in a position to pay its debts, and proceeded to dissolve Golden Travel Club Ltd, declaring the company bankrupt and in liquidation.