Inside Malta’s New Rescue Law: How A Restructuring Plan Becomes Reality

Imagine a business that is under pressure. Sales have dipped. A key contract is at risk. Cash is tight. The board meets and, after honest analysis, concludes the company faces a likelihood of insolvency — that is, a state of financial difficulty falling short of actual insolvency but sufficiently serious to warrant early intervention — unless decisive action is taken.

Under the Pre-Insolvency Act (hereinafter the “Act”), enacted by Act XXIV of 2022 to partially transpose Directive (EU) 2019/1023 on preventive restructuring frameworks, that company may apply to the Civil Court (Commercial Section) to open a preventive restructuring procedure. The application must be made or endorsed by a licensed insolvency practitioner — a professional regulated under the Insolvency Practitioners Act. This is deliberate: the process begins with a regulated professional acting as gatekeeper and, once the court admits the case, as steward.