Frank Portelli cannot decide St Philip's Hospital fate alone, court appoints administrators

Frank Portelli can stay on as the sole director of the Golden Shepherd Group, the administrator of St Philip’s Hospital, but any decisions regarding the company will have to be made together with joint provisional administrators, the court ruled.

This was the substance of a decree handed down on Wednesday by Mr Justice Joseph Zammit McKeon, presiding over the commercial court, in a case filed by HSBC Bank against the company.

The hospital has been closed since 2010, and in 2016 a court had ordered that Golden Shepherd pay the sum of €11.5 million in loans to HSBC Malta.

A few weeks ago, Portelli, who is a medical doctor, had publicly declared that he was offering the government an agreement for the use of the hospital’s beds in the light of the COVID-19 pandemic. The offer was never taken up.

HSBC said that while it didn’t oppose the government being temporarily given the use of the hospital in the best interests of the public, it was objecting to the fact that it was Portelli who had made the offer, in view of his company’s grave financial problems.

Portelli should not expect to take decisions about the company and its assets, binding them with regards to third parties, especially as the dissolution of Portelli’s company was being requested by the bank, it said.

St Philip's Hospital closed in 2010

Portelli had, in turn, argued that the deal would be beneficial to his creditors and the appointment of an administrator with no experience in healthcare would not. Furthermore, the bank had sufficient security for the loan facility it had given to the company.

The court ruled on the matter by appointing two joint provisional administrators and ordering that any decision regarding the hospital had to be taken by Portelli together with the administrators, including any negotiations with the government.

Any action made by Portelli alone would be null and void, said the judge.

In addition, he said, any agreement entered into by Portelli and the administrators had to be approved by the court, on pain of nullity.