Early detection of bankruptcy part of insolvency reform

The reform of the Maltese Insolvency framework will include an early detection process, which will detect any negative financial developments within a business.

This is part of the pre-restructuring bill which focuses on implementing an early detection system that would help indicate businesses suffering from insolvency.

This reform was announced and discussed in parliament on Wednesday by the Economy, European Funds and Lands minister, Silvio Schembri.

Schembri said that these amendments focus on achieving the transposition of Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 and it aims to implement a well-working framework.

The legislative amendments also include the insolvency practitioners act which focuses on implementing new regulations to better facilitate the sale and transfer of property owned by bankrupt entities.

Schembri also said that the reform will include a public awareness campaign which will make sure that the public and the parties involved.

He mentioned that a training strategy is being implemented to ensure that the insolvency practitioners will be qualified to offer the best services to entrepreneurs.

A third bill to amend the Commercial Code was also included, which focuses on adjusting the bankruptcy framework. Schembri said that this bill will work towards modernising the current process, implementing clear time frames and providing for the discharge of debts of honest entrepreneurs within three years.

“The scope of the acts put forward is to encourage an entrepreneurial spirit by means of instilling a mindset that everyone deserves a second chance,” he said.