Company recovery in Malta, with a comparative analysis

Abstract

The first Chapter is an introduction to the other Chapters. It analyses the new approach in insolvency legislation which has evolved into a Rescue Culture. An attempt is made towards trying to define 'Rescue Culture' and to outline its functions. There are also some managerial aspects to the implementation of Corporate Rescue plans. Emphasis is made on the fact that rescue attempt is a matter of collective concern. The Chapter then gives a list of six principles, which are explored in the subsequent Chapters of the Thesis. These principles should govern every Corporate Rescue attempt. In the first part of Chapter two, an attempt is made to analyse the statutory conditions which have to be satisfied in order for the Court to accede to a Company Recovery Application. This judicial task necessarily involves the analysis of the facts presented in front of the Court. Legal expertise is intertwined with other commercial and economic expertise in order to take a conclusive decision as to whether a Company Recovery Application should be acceded to or not. The second part of the Chapter analyses the petitioners which can present the Application. Chapter three explores the effects of the Company Recovery Order. The Order imposes a period of moratorium on the company, during which the creditors cannot enforce their individual proprietary claims against the company. The Chapter then analyses the exceptions to this. The Court has to conduct balancing exercises in order to reconcile the rights of the general body of creditors with the individual proprietary claims. There are also instances, as illustrated in the Chapter, whereby the Court will lift the moratorium in the promotion of Rescue Culture.