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Restructuring a Company in Malta

Restructuring a Company in Malta

The Maltese economy is one of the best performing economies in the European Union, however, this does not stop all businesses from facing financial problems. With a strong legislation governing insolvency and bankruptcy, the Maltese government has also set up in place restructuring procedures for companies. These procedures are usually employed in order to avoid bankruptcy and have a great chance of helping a company stay afloat. Many times, corporate restructuring has helped Maltese companies in difficulty.

Our attorneys in Malta can offer information about the procedures related to saving a company from bankruptcy.

Financial reorganization in Malta

Financial reorganization is usually entered into voluntarily in Malta. Companies facing financial distress have the possibility of negotiating the payment of the debts directly with the creditors in order to avoid bankruptcy and liquidation.

Corporate restructuring through financial reorganization implies a sound plan through which the company manages to pay its debts without selling any of its assets. This can be done with the help of accountants, but also of Maltese lawyers who can assist from a legal point of view. 

We also invite you to watch our video on corporate restructuring in Malta:

Company restructuring under the Maltese Commercial Code

Corporate restructuring in Malta can also be requested by the creditors of a company, according to the Companies Law. According to it, a company can choose between financial reorganization which is imposed by the law or to make an arrangement with the creditors to pay its debts.

Restructuring imposed by the Companies Act implies for a company to file a petition for reorganization before being unable to pay the creditors, therefore once the management realizes the business it will soon start to have difficulties. The petition will be filed with a Maltese court which will impose the reorganization. This way, the creditors cannot claim for the outstanding amounts to be recovered immediately.

When it comes to the compromise or arrangement scheme, the Maltese company undergoing restructuring to hold a shareholders’ meeting through which an arrangement with the creditors is made. The arrangement must be approved by a court of law.

For more information on restructuring options for companies, please contact our law firm in Malta.