Carlo Stivala eyes St Philip’s Hospital redevelopment plan

Developer Carlo Stivala has emerged as a potential buyer of the long abandoned St Philip’s Hospital, a large and strategically located private healthcare facility that has remained vacant for more than a decade. The development has surfaced during ongoing liquidation proceedings involving the hospital’s owning company and has prompted renewed judicial scrutiny over how creditor interests should be balanced against private negotiations.

The case places renewed attention on one of Malta’s most prominent stalled properties and highlights wider issues surrounding liquidation procedures, forced property sales and the discretion courts may exercise when alternative repayment proposals are presented. While no transaction has yet been concluded, the court has agreed to suspend an imminent public sale process to allow further examination of the proposed offer.

Background to the hospital’s closure and ownership

St Philip’s Hospital was once promoted as a flagship private healthcare project. Despite early expectations that it would become a key private medical facility, the hospital ceased operations and has remained unused for over ten years. Over time, the abandoned complex has become symbolic of unresolved commercial disputes and unfinished development ambitions.

The property is owned by Golden Shepherd Group Ltd, a company controlled by businessman Frank Portelli. Golden Shepherd Group entered financial difficulty following mounting liabilities and disputes with creditors, most notably HSBC. As the company’s financial position deteriorated, liquidation proceedings were initiated to recover outstanding debts through the realisation of company assets.

Liquidation proceedings and creditor claims

Golden Shepherd Group is currently undergoing formal liquidation. As part of this process, the Office of the Official Receiver is tasked with safeguarding creditor interests and ensuring that assets are disposed of in a manner consistent with Maltese insolvency law.

A major turning point in the case occurred following a court order requiring Golden Shepherd Group to pay HSBC €12 million in outstanding liabilities. This ruling reinforced the bank’s position as a principal creditor and triggered procedural steps to recover funds through the sale of the company’s primary asset, namely the St Philip’s Hospital property.

In July, the Office of the Official Receiver was instructed by the court to issue a public call for offers for the hospital building. The objective of this process was to secure market based bids that could generate sufficient proceeds to repay creditors either in full or to the highest extent possible.

Emergence of Carlo Stivala’s proposal

During recent court sittings, Frank Portelli informed the court that developer Carlo Stivala had expressed interest in acquiring the hospital property. According to the submissions made, Stivala is prepared to settle the facility’s outstanding debts as part of a negotiated acquisition.

This declaration was presented by Portelli in an effort to delay the scheduled public call for offers. The argument advanced was that a direct transaction with a developer willing to cover outstanding liabilities could potentially deliver a faster and more comprehensive settlement for creditors without the uncertainties of an open bidding process.

The proposal immediately raised questions regarding procedure and fairness, particularly in relation to whether private negotiations should be permitted to interrupt a liquidation driven public sale.

Court deliberations and interim decision

On Monday, the court considered the competing positions of the parties involved. HSBC objected to any suspension of the public call for offers, arguing that while Stivala’s proposal “could be interesting”, the Official Receiver remained legally obliged to pursue the best possible outcome through an open and transparent process.

The bank maintained that a public call for offers ensures equal access for all interested parties and reduces the risk of undervaluation. HSBC further argued that any interested buyer, including Stivala, should participate within the same framework as other potential bidders.

Despite these objections, Judge Ian Spiteri Bailey ruled that additional time should be granted to explore the proposed deal. The court noted that assurances had been given that Stivala was willing to cover all outstanding debts, a factor which warranted closer examination before proceeding with a forced sale.

Conditions imposed by the court

In a decree issued the same day, Judge Spiteri Bailey directed the Official Receiver to formally contact Carlo Stivala. The purpose of this engagement is to request a detailed business plan outlining how the acquisition would be structured and how creditors would be repaid.

The court specifically requested clarity on timelines, funding sources and mechanisms through which outstanding liabilities would be settled. This requirement reflects judicial caution and ensures that any private proposal is subjected to scrutiny comparable to that applied during a public sale process.

As a result of this decision, the public call for offers has been suspended until March 2026. This temporary suspension does not cancel the sale process but delays it pending the outcome of negotiations and the assessment of Stivala’s proposal.

Legal considerations in suspending a public sale

The ruling underscores the discretionary power courts may exercise in insolvency proceedings. While public calls for offers are generally favoured for their transparency, Maltese courts retain the authority to pause such processes when credible alternatives are presented that could better protect creditor interests.

In this case, the court balanced the procedural safeguards of an open sale against the possibility of a negotiated settlement that promises full repayment. By imposing strict reporting requirements and involving the Official Receiver directly, the court sought to mitigate risks associated with private dealings.

The decision does not establish a precedent that private offers automatically override public processes. Rather, it reflects a fact specific assessment based on assurances provided and the potential for improved creditor outcomes.

Position of HSBC and creditor protection

HSBC’s objections highlight the tension that often arises between major creditors and company owners during liquidation. From the bank’s perspective, delays introduce uncertainty and may reduce leverage in recovering funds.

The bank’s argument that the Official Receiver is legally obliged to seek the best possible offer is grounded in insolvency principles that prioritise collective creditor interests over individual arrangements. HSBC’s position suggests concern that private negotiations may disadvantage creditors who are not directly involved in discussions.

Despite these concerns, the court’s ruling emphasised that creditor protection remains central. The requirement for a detailed business plan and the involvement of the Official Receiver serve as safeguards to ensure that any eventual deal meets legal and financial standards.

Implications for the St Philip’s Hospital site

If an agreement with Carlo Stivala is eventually concluded, the hospital site could see long awaited redevelopment. While no formal plans have been submitted publicly, the request for a business plan indicates that the court expects clarity on future use, financial viability and compliance with regulatory obligations.

The hospital’s prolonged vacancy has raised broader questions about land use, urban planning and the economic cost of stalled developments. Any future project would likely attract public interest given the site’s history and scale.

However, it remains equally possible that negotiations may fail or prove insufficient, in which case the public call for offers would resume after March 2026. In that scenario, the property would be opened to competitive bidding under the supervision of the Official Receiver.

Broader significance for insolvency practice

The St Philip’s Hospital case illustrates the complexities inherent in high value insolvency proceedings involving landmark properties. It demonstrates how courts must weigh procedural integrity against pragmatic solutions that may deliver faster or fuller repayment.

For developers, the case signals that interest in distressed assets must be supported by concrete financial planning and transparent engagement with insolvency authorities. Expressions of interest alone are insufficient without demonstrable capacity to settle liabilities.

For creditors, the ruling reinforces the importance of judicial oversight and the role of the Official Receiver in evaluating proposals that deviate from standard sale mechanisms.

Conclusion

The court’s decision to grant additional time for negotiations between Frank Portelli and Carlo Stivala marks a significant pause in the liquidation process of Golden Shepherd Group. While the suspension of the public call for offers has drawn objections from HSBC, the ruling reflects a cautious willingness to explore alternatives that could potentially secure full repayment of outstanding debts.

By requiring a detailed business plan and involving the Official Receiver directly, the court has sought to balance flexibility with accountability. The outcome of these negotiations will determine whether St Philip’s Hospital transitions from a long abandoned site into a redeveloped asset or proceeds to an open market sale.

As the March 2026 deadline approaches, all parties remain subject to judicial scrutiny. The case continues to serve as a prominent example of how Maltese courts navigate complex insolvency matters while seeking to protect creditor interests and uphold legal standards.

FAQs

What is St Philip’s Hospital?
St Philip’s Hospital is a private medical facility in Malta that has remained vacant for over ten years following financial difficulties and ownership disputes.

Who owns St Philip’s Hospital?
The hospital is owned by Golden Shepherd Group Ltd, a company controlled by Frank Portelli which is currently in liquidation.

Why is the hospital being considered for sale?
The property is being considered for sale to repay outstanding debts owed by Golden Shepherd Group to its creditors including HSBC.

Who is Carlo Stivala?
Carlo Stivala is a property developer who has expressed interest in acquiring the hospital and settling its outstanding liabilities.

Has the hospital been sold?
No sale has been concluded. Negotiations are ongoing and the public call for offers has been temporarily suspended.

Why was the public sale suspended?
The court granted additional time to assess a proposal that includes assurances of full debt repayment which warranted further examination.

What role does the Official Receiver play?
The Official Receiver oversees the liquidation process and is responsible for ensuring that creditor interests are protected.

What objections were raised by HSBC?
HSBC argued that the property should be sold through an open process to secure the best possible offer and ensure transparency.

What happens if negotiations fail?
If negotiations do not result in a satisfactory proposal, the public call for offers is expected to resume after March 2026.

Does this decision guarantee redevelopment?
No redevelopment is guaranteed. Any future project depends on the outcome of negotiations and compliance with legal and financial requirements.