A judge has declared Daniels shopping complex in Ħamrun as insolvent.

Legal action was filed in 2014 by one of the owners’ creditors, Panta Contracting Ltd, over an outstanding debt of €1.5 million.

The court heard that, apart from this debt, the owners of the shopping complex, D.A. Holdings, had several other creditors who were owned a total of €12 million plus interest.

In its submissions, Panta Contracting argued that D.A. Holdings was in a state of insolvency and only appeared solvent on paper due to a €20 million revaluation of its properties in 2012, the last time the company filed its accounts.

Manuel Castagna, a partner at the company’s auditors, Nexia BT, told the court the company did not have enough money to pay its creditors on time. He said the only way creditors could be paid was through the sale of the company’s properties or a fresh capital injection.

Mr Castagna told the court that the company’s accounts for 2013 and 2014 had not yet been completed.

Company director Steven Delicata told the court the shopping complex had lost around half a million owed to them by the operators of More supermarkets. The former boss of More supermarkets, Ryan Schembri, fled the country in 2014 leaving behind millions in debts.

One of Mr Schembri’s companies, Cassar and Schembri Marketing Limited, was dissolved last year by court order after upholding requests by two of its many creditors who are owed an estimated €2 million.

Lawyer Richard Galea Debono, appointed as a provisional administrator, told the court More supermarket used to attract many people to the shopping complex. He said the supermarket closed down for reasons unrelated to the shopping complex itself.

In his judgment, Mr Justice Joseph Zammit McKeon ruled that the shopping complex had reached “a point of no return” as it did not have enough income to pay its debts.

The eventual sale of the company’s assets to pay its debts would no longer allow it to operate as a business, therefore, its dissolution and winding up was “inevitable”, the court found.

Dr Galea Debono was appointed as the company’s liquidator. A verification of the company’s assets will take place and a report will be presented on June 16.

The company was ordered to pay all court and liquidation expenses.