The judicial sale by auction of the site occupied by the derelict Jerma Palace Hotel in Marsascala will not happen as planned after HSBC Bank asked for its suspension.
The sale of the entire area was meant to take place on Tuesday but this has been postponed after the bank filed a request in the acts of the case asking for proceedings to be temporarily suspended.
The sale had been ordered by the court in an ongoing case instituted by HSBC Bank Malta against brothers Geoffrey and Peter Montebello’s firm, JefPet Ltd.
But a note filed by the bank’s lawyer justified the request saying it wanted to be in a better position to “re-evaluate the situation”.
Sources said the bank did not want the judicial sale by auction to go ahead because of a pending appeal of a civil case between the same parties over monies the bank is claiming it is owed by the Montebello brothers.
The sources said the case, through which the bank is trying to recoup almost €13 million, was decided by the First Hall of the Civil Court but the judgment was appealed and still pending.
Jerma was largest in Malta, with 700 beds, at 1982 opening
According to documents seen by the Times of Malta, HSBC Bank is claiming it is owed €12,935,467, of which €9.78 million was capital and the rest interest raked up on the loan.
A court expert has valued the former hotel and its surrounding land at €20.8 million.
For several years, the abandoned area has been a cause for concern for residents and those frequenting the area because what remained of the building was slowly falling apart. The area had also become a dumping ground.
In August, the Planning Authority kicked off the process to demolish the derelict Jerma hotel, years after it closed its doors. It issued an enforcement notice, ordering the hotel’s owners to demolish the building.
The Jerma Palace Hotel and its surrounding land covers an area of a staggering 38,745 square metres – almost the size of five-and-a-half football pitches.
According to notarial deeds, the land on which the hotel was built originally belonged to the Franciscan Conventuals and was sold to Santumas Shareholdings plc, which in turn sold it to the Libyan firm Lafico in 1976.
The hotel closed down in March 2007 and Jefpet Limited purchased it from Lafico for €18,634,987 in July 2008. They spent a further €1.1 million on equipment and furnishings.
Jefpet Limited purchased more parcels of land from Santumas Shareholdings plc worth almost €3.8 million. The total paid by Jefpet Limited for the Jerma site was €22.4 million.
According to the court expert, it will cost €1.5 million to demolish the building.
The Jerma Palace Hotel was Malta’s most prestigious hotel in the south. Then the biggest in Malta with 700 beds, it was opened in 1982. It had taken three years to build and cost €16.3 million. Until it closed it was operated by the Corinthia chain.