A court has appointed joint provisional administrators for St Philip's Hospital, to act with Frank Portelli as sole director.
The decision followed an application by HSBC Bank Malta requesting the appointment of an administrator. The bank also asked the court to divest Portelli of his powers of sole director of the Sta Venera hospital, which closed its doors several years ago.
The bank’s move was sparked by news that Portelli had offered the hospital to the government for use to treat COVID-19 patients.
Mr Justice Joseph Zammit McKeon observed that the appointment of provisional administrators would not impinge upon separate proceedings concerning the dissolution and liquidation of the holding company, The Golden Shepherd Group Ltd, which proceedings are still ongoing.
Yet at such “a sensitive stage,” pending judgment, the court said it needed to rest assured that “the administration and financial management of the company is conducted in a proper and transparent manner.”
Proper, effective and transparent management by directors was “imperative” when the company had one sole asset to meet creditors’ claims, the court observed, adding that the workings of a sole director needed to be placed under scrutiny “at such a delicate and sensitive stage.”
For this reason, the court appointed lawyer John L. Gauci and auditor Noel Mizzi as joint provisional administrators, whilst declaring that Portelli will retain his powers as sole director. From now on, however, the court-appointed administrators are to be involved in all actions concerning the company, including talks with the government.
Any agreement concerning St Philip’s Hospital was to be subject to court approval under pain of nullity.
Whilst not objecting to the use of the hospital by the state, HSBC had objected to the fact that the negotiations were to be handled solely by Portelli “given the company’s precarious financial situation.”
On the other hand, Golden Shepherd Group had rebutted that as long as any agreement was “just” negotiations would not prejudice creditors. Besides, the bank had sufficient hypothecs and privileges to guarantee its credit.