The liquidator appointed this week to European Forestry Growers will be working to try to redeem money owed by the company to creditors.

After the creditors' meeting, the liquidator, Mr Aidan O'Connell of Deloitte & Touche, told more than 100 angry growers who travelled to Dublin for the meeting but were denied access that he would fully investigate the company's activities.

In its statement of affairs, European Forestry Growers, claims to have no assets apart from some office equipment, which it estimates would realise around £500 in a liquidation sale.

The company puts an estimated value of £250,000 on its contracts with hundreds of growers and it has incurred trade debts of more than £48,000.

The Revenue Commissioners is owed £8,305, mainly in respect of PRSI and PAYE due. Other creditors are due £346,744 the largest of whom are the directors, Mr Conor Mohan and Mr Leo Mohan, who are each owed £100,000.

This week, the directors refused to speak directly with the growers, issuing a statement through their solicitor, explaining how the company folded. They insist the growers are not technically entitled to be recognised as creditors.

Mr Leo Mohan blamed the collapse of the British Christmas tree market last year and "adverse publicity" for the company's demise.

He explained the company's planting programme was based on a report by Irish Trade Board, which showed the biggest selling tree in the British market was the Norway Spruce. "Our market research showed that 50 per cent of approximately six million trees in the UK market were imported from Europe, and EFG pursued this market since 1992 using agents and franchisees in the UK."

Last year, after it encountered difficulties in that market, he said the company wrote to growers suggesting that it would only be possible to market whatever trees might be ready at £1.50 each.

Both directors say they subsequently advanced loans of £100,000 each to EFG and sought to bring in an investor to tide it over its difficulties. But they claim adverse publicity in an RTE television programme, which carried reports of growers' difficulties, had scuppered that deal.

Further attempts to raise finance he said were also hampered. At this stage, Mr Leo Mohan says, the company was forced to take legal advice and go into liquidation.

A committee of inspection has been formed, which includes representatives of the IFA and a number of growers and the two directors. They will be working with the liquidator in realising funds for creditors and in exploring opportunities for selling on growers' contracts.

They will also investigate the company's current financial situation.

European Forestry Growers last filed annual returns at the Companies Registration Office in April 1994. At that time, it reported losses of £131,951. The liquidator said the company had indicated to him it had audited accounts for 1995 and draft accounts for 1996, which will be examined.

Industry estimates suggest the company generated up to £6 million from farmers through the Christmas tree planting scheme over the years.