In a landmark decision delivered on the 11th January 2023, in the names ‘Av. Jonathan Abela Fiorentino noe vs Eolia Limited’ (case no. 68/2022 ISB), the Civil Court (Commercial Section) rejected the application filed by defendant company demanding the Court to order a retrial of the liquidation proceedings that led to the company being placed into liquidation.

This decision constitutes the first occasion on which the Court pronounced itself on this specific legal matter, since the issue was previously untested.

The Insolvency Practitioners Act, the Pre-Insolvency Act and the Commercial Code (Amendment) Act were passed by the House of Representatives on the 14^th of December 2022 and were assented to by the President on the 23^rd of December 2022.

The Insolvency Practitioners Bill (‘the Bill’) is at its second reading in Parliament. The Bill is intended to partially transpose EU Directive 2019/1023 (‘the Directive’) on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt.

The Pre-Insolvency Bill (‘the Bill’) is at its second reading in Parliament. The Bill is being proposed as an Act to partially transpose EU Directive 2019/1023 (‘the Directive’) on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt. In short, new legal tools are being provided in a bid to rescue viable businesses in distress from entering into a state of insolvency.

Three bills are being read in Parliament proposing new insolvency-related legislation and amendments:

In a decision delivered on the 13^th March 2022, case no. 246/2018 ISB, the Civil Court (Commercial Section) placed the defendant company into liquidation on the ground that it was unable to pay its debts, after considering and concluding that the circumstances that had previously led the Court in the same case to determine the existence of a bona fide dispute and consequently suspend the hearing of the liquidation proceedings, no longer existed.

In its recent decision Xuereb v Weber Construction Limited Et (decided 18 March 2021) the Civil Court (Commercial Section) weighed in once more on the appropriate tests to be applied when assessing a company's inability to pay its debts under Maltese corporate insolvency law. One of Weber Construction Limited's ("Weber") shareholders filed an application in court requesting the company's dissolution and consequential winding up on the grounds inter alia that it was unable to continue to pay its debts.

Prior to 1^st January, 2021, the cross-border recognition and enforcement of insolvency proceedings and judgements between the European Union ("EU") and the United Kingdom ("UK") was largely consolidated within the framework of the European Insolvency (Recast) Regulation (the "EIR") which generally attributed automatic recognition to such proceedings and/or judgements. Following the end of the Brexit transitional period on the 31^st December 2020, the EIR no longer applies to the UK.

Any lending of funds needs to be adequately secured. This is a practice which every lender knows and should observe in order to adequately protect his credit. However, the meaning of "adequate security" is not straight forward and lenders must be careful when selecting their preferred security