The Malta Civil Court has cleared the path for two properties belonging to Ryan Schembri—the fugitive businessman behind the spectacular 2014 collapse of More Supermarkets—to be sold at judicial auction, marking a concrete step toward recovering a fraction of the estimated €40M in outstanding debts tied to one of Malta's most damaging retail fraud schemes.
Why This Matters:
• BNF Bank successfully lifted asset freezes on a Mellieħa villa and a Vittoriosa apartment, which will now be auctioned to recover money owed directly to the bank.
• Proceeds will first satisfy BNF's debts; any leftover funds remain frozen under the Asset Recovery Bureau's control.
• The ruling showcases how Malta's judicial auction mechanism works in high-profile fraud cases, with creditors competing to reclaim funds from a collapsed €40M pyramid.
• No public auction dates have been announced yet, but the legal obstruction has been removed following the court's 2025 decision.
The Freeze-Lift Decision
In a 2025 ruling, the court dismissed objections raised by Malta's Asset Recovery Bureau (ARB), which oversees frozen criminal assets, and sided with BNF Bank's request to unfreeze two properties. The bank argued that its secured claim should take precedence over the general asset freeze imposed when Schembri was extradited in 2022. The decision is significant: it allows creditors with documented, court-recognized claims to pursue recovery independently, even when assets remain under criminal investigation.
The two properties in question—a villa in Mellieħa and an apartment in Vittoriosa—represent tangible remnants of a business empire that imploded under the weight of alleged fraud, money laundering, and systematic investor deception. Both will now be advertised and sold under Malta's judicial auction process, a court-supervised sale mechanism typically used when creditors and debtors cannot reach a settlement.
What This Means for Creditors
For the dozens of creditors left holding worthless cheques and IOUs after More Supermarkets vanished overnight in 2014, this auction represents a rare opportunity to see actual recovery. However, the reality is sobering: with €40M in total debts—roughly €6M owed to Maltese investors and the balance to unnamed foreign parties—two properties are unlikely to satisfy even a quarter of outstanding claims.
BNF Bank holds priority on proceeds from the villa and apartment. After the bank's debts are cleared, any remaining balance will return to the frozen asset pool managed by the ARB, potentially to be distributed among other creditors through separate legal proceedings. The court's decision effectively creates a hierarchy: secured creditors with recognized claims can "jump the queue" ahead of the broader asset freeze.
Among the other creditors who remain in line:
• Galleria Properties Limited, owed over €92,000
• Alf Mizzi Limited, owed nearly €150,500
• Lawyer Carmel Chircop, who lent €750,000 to Schembri's company, Erom Limited
• Hundreds of small investors who were allegedly given bouncing cheques or pressured to reinvest profits into what prosecutors describe as a Ponzi-style operation
One particularly notorious claim involved a €3.5M debt agreement. According to prosecutors, individuals Edmond Mugliett and Alexander Farrugia were named as alleged lenders in a fraudulent debt agreement that was used to legally obligate the new buyer of More Supermarkets to pay €3.5M—a transaction now considered part of Schembri's systematic fraud scheme.
How Judicial Auctions Work in Malta
While no specific auction dates have been announced for Schembri's properties, Malta's judicial auction process is designed to maximize recovery while ensuring transparency. Here's what residents should know if interested in participating or monitoring the sale:
Property Listing: The auction will be advertised on government court services websites, the auctioneer's platform, and daily newspapers. Platforms like Subbasta Malta typically list upcoming judicial property auctions with valuations and dates, making it easy for interested buyers to track availability.
Inspection and Valuation: A court-appointed expert assesses the market value and prepares a public report detailing the property's condition, available online and at the registry. Interested buyers can file a court application to inspect the property before bidding.
The Auction: Bids are made before a court-nominated auctioneer. The highest bidder wins but must deposit the full purchase price within 7 days at the court registry—no financing or electronic payment arrangements. This cash-only requirement is why judicial auction properties often sell below market value; it limits the pool to serious, liquid buyers.
This structure prevents collusion and ensures creditors recover funds as quickly as possible.
The Schembri Saga: From Retail King to Fugitive
Ryan Schembri fled Malta in 2014, shortly before More Supermarkets imploded in a cascade of bounced payments, unpaid suppliers, and defrauded investors. For eight years, he evaded Maltese authorities while criminal proceedings moved forward in absentia. He was finally extradited in 2022, triggering an immediate freeze on all identifiable assets under the Asset Recovery Bureau's authority.
Prosecutors allege that Schembri operated More Supermarkets as a front for a complex fraud and money laundering scheme. Investors were lured with promises of high returns on food import ventures, only to receive worthless cheques or be pressured into "reinvesting" phantom profits. Suppliers were left unpaid, and the chain's sudden closure left employees and customers in the lurch.
The €40M total debt figure includes both secured and unsecured claims, with a significant portion tied to foreign creditors whose identities have not been disclosed. One of Schembri's co-owned companies, Cassar and Schembri Marketing Limited, was liquidated separately to pay creditors, distributing what little remained after the collapse.
The Asset Recovery Bureau's Role
The Asset Recovery Bureau, Malta's national authority for tracing and managing criminal proceeds, plays a dual role in cases like Schembri's: it freezes assets to prevent dissipation during prosecution, and it manages the eventual disposal of confiscated property through sales and auctions.
The ARB has conducted several smaller auctions in recent years, including the 2019 sale of a 30-year-old Fiat hatchback and a 26-year-old speedboat. In 2024, the Bureau partnered with Wilsons Auctions, a UK-based firm, to enhance its capacity for valuation, preservation, and marketing of seized assets, including through hybrid physical and online auctions.
Asset Recovery in Malta: Progress and Precedent
The Schembri case represents one of the few high-profile instances where large-scale property auctions have been explicitly authorized to satisfy creditor claims—a signal that Malta's courts are increasingly willing to prioritize victim recovery over indefinite asset freezes. Other major fraud cases—such as the €52M freeze on tax fraudster Christian Borg's assets (later revoked after settlement) or the €20M freeze on Armin Ernst's assets (linked to the hospitals concession scandal)—have resulted in long-standing freezes with limited public recovery mechanisms.
For residents concerned about Malta's track record on financial crime, this auction demonstrates tangible movement. It shows that Malta's judiciary can navigate the tension between criminal asset freezes and civil creditor recovery, allowing legitimate claims to proceed even during ongoing investigations. Whether this becomes a model for other frozen cases remains to be seen, but it signals a judicial willingness to balance justice for victims with the legal protections needed during prosecution.
What Happens Next
The court's ruling removes the final legal barrier to auctioning the Mellieħa villa and Vittoriosa apartment, but no auction dates have been set. Once advertised, the properties will likely attract interest from cash buyers and investors looking for distressed real estate opportunities.
For Malta's broader creditor community, the auction is a symbolic victory as much as a financial one: it demonstrates that even in cases involving complex international fraud, the legal system can eventually recover tangible assets. However, the arithmetic remains bleak. Two properties, however valuable, cannot repay €40M in debts—or restore the trust shattered when More Supermarkets collapsed.
The Schembri case also highlights a persistent challenge in Malta's asset recovery framework: the tension between criminal asset freezes (designed to preserve evidence and punish wrongdoing) and civil creditor claims (designed to make victims whole). The court's decision to prioritize BNF Bank's secured claim over the ARB's blanket freeze suggests that Malta's judiciary is willing to balance these competing interests on a case-by-case basis, rather than allowing criminal proceedings to indefinitely block legitimate recovery efforts.
