Early in October, three new Bills were tabled to Parliament: a Bill to amend the Commercial Code provisions on Bankruptcy, a Pre-Insolvency Bill, and a Bill to regulate Insolvency Practitioners. These Bills intend to partially transpose the EU Directive 2019/1023 on preventive restructuring frameworks. The aim of the Directive is to encourage Member States to implement measures that enable the early detection of financial difficulties to avoid insolvency altogether, failing which, there could be a smoother transition into insolvent liquidation.

Just before going into summer recess Maltese Parliament held the first reading of three Acts which, once adopted, are bound to start changing the Maltese insolvency law landscape. These Acts will be amending the Commercial Code and will be introducing a new Insolvency Practitioners Act and a Pre-Restructuring Act.

Malta has, to date, chosen to address corporate distress as a result of the COVID-19 pandemic by extending credit capacity through the issuance of State guarantees, thus allowing them access to financing channels that would otherwise have been impossible to secure.

The country seems now ready to jump onto the insolvency-buffer bandwagon, several weeks after the rest of the world began to enact special COVID-19 inspired amendments to their insolvency laws. Bill 128 of 2020 proposes amendments to the Companies Act which include, inter alia:

This is the Malta contribution published in a report by the AIJA (International Association of Young Lawyers) Insolvency Commission – November 2020

1. What emergency measures in insolvency or restructuring legislation has Maltaadopted to help businesses cope with the economic crisis caused by the COVID-19pandemic?