Obsah (4)

Article 13Article 4Article 2Article 1

ACT AN ACT to provide for the partial transposition

Directive (EU) 2019/ 1023, to strengthen the legislative framework relating to insolvency and to make provision with respect to matters ancillary thereto or connected therewith. 23rd December, 2022 ACT XXIV

2022. 1.

this Act is the Pre-Insolvency Act. Short title and scope.

this Act is to provide for a modern framework, relating to early warning signs

insolvency, and restructuring procedures directed at avoiding insolvency, and to partially transpose Directive (EU) 2019/1023

the European Parliament and

the Council

20 June 2019 on preventive restructuring frameworks, on discharge

debt and disqualifications, and on measures to increase the efficiency

procedures concerning restructuring, insolvency and discharge

debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency). PART I PRELIMINARY PROVISIONS 2. In this Act, and in any regulations made thereunder, unless the context otherwise requires: Interpretation. "affected parties" means creditors, equity holders, or employees including an employees’ representative, whose claims or interests are, or may be, directly affected by a restructuring plan; "best-interest-

-creditors test" means a test that is satisfied if the Court is reasonably satisfied that no dissenting creditor would be worse

f, under the specific restructuring plan, than such a creditor would be if the normal ranking

liquidation priorities were applied, or in the event

the next-best-alternative scenario, if the restructuring plan were not confirmed; "close-out netting provision" shall have the meaning assigned to it in the Set-

f And Netting on Insolvency Act or regulations issued thereunder;   "competent authority" means the Insolvency and Receivership Service within the Malta Business Registry established by the Malta Business Registry (Establishment as an Agency) Order;    S.L. 595.27. "Court" means the Civil Court (Commercial Section);    Cap. 16.   PRE-INSOLVENCY "debtor" means any natural person carrying out a trade, business, craft or profession in or from within Malta, or any legal organisation in terms

the Second Schedule to the Civil Code, including, but not being limited to, any commercial partnership formed and registered under the Companies Act, and expressly excludes: (a) insurance undertakings or reinsurance undertakings as defined in points

Article 13

Directive 2009/138/EC; (b) credit institutions as defined in point

Article 4

Regulation (EU) No. 575/2013; (c) investment firms or collective investment undertakings as defined in points

Article 4

Regulation (EU) No. 575/2013; (d) central counter parties as defined in point

Article 2

Regulation (EU) No. 648/2012; (e) central securities depositories as defined in point

Article 2

Regulation (EU) No. 909/2014; (f) other financial institutions and entities listed in the first sub-paragraph

Article 1

Directive 2014/59/EU; (

1. g)public bodies under national law; and (
2. h)natural persons in respect

debts not incurred in the carrying out

a trade, business, craft or profession; "equity holder" means a person that has an ownership interest in a debtor or a debtor’s business, including a shareholder, provided that equity holders having separate claims against the debtor shall, notwithstanding, remain entitled to be treated separately as creditors

the debtor;               Cap. 452.    "essential executory contract" means a contract between a debtor and one

individual enforcement actions is granted or applied, the parties are under an obligation to perform, and the performance

which shall be necessary for the continuation

the debtor’s day-to-day business, including contracts for supplies or services that, if suspended, would lead to the debtor's activities being interrupted, or materially and detrimentally affected, or otherwise becoming substantially diminished, but shall exclude contracts

employment as regulated by the Employment and Industrial Relations Act; "insolvency practitioner" means a person authorised to act as an insolvency practitioner in terms

the Insolvency Practitioners Act; "Minister" means the minister responsible for the registration

PRE-INSOLVENCY commercial partnerships; "

ficial

the debtor" means: (a) in relation to a debtor being a company formed and registered under Part V

the Companies Act, or a limited liability company formed in terms

the Commercial Partnerships Ordinance, or any director, or other person, by whatever name they may be called, carrying out substantially the same functions in relation to the direction

the company as those carried out by a director;  Cap. 386.  (b) in relation to a debtor being a commercial partnership formed and registered under Part III

the Companies Act or the Commercial Partnerships Ordinance where applicable, any partner in whom the administration and representation

the partnership is vested;  Cap. 386.  (

1. c)in relation to a debtor being a legal organisation not mentioned in paragraphs (
2. i)or (ii), shall include any person, under whatever designation they may operate, who, whether alone or with others, is designated by the constitutive documents

the legal organisation or any other instrument, decision, order or arrangement binding on the legal organisation, as being vested with the administration and representation thereof, or through whom it is, or may be, exercised: Provided that where the debtor is a natural person, any reference to the

ficials

the debtor shall be construed as referring to the debtor himself; "restructuring" means the implementation

any measures aimed at preserving or restoring the debtor's economic viability, that may include changing the composition, conditions or structure

a debtor's assets and liabilities or any other part

the debtor's financial structure, sales

assets or parts

the business, the sale

the business as a going concern, as well as any necessary operational changes, or any combination

such elements. PART II EARLY WARNING TOOLS AND CRISIS PREVENTION 3. Debtors shall be entitled to access early warning tools intended to enable debtors to detect circumstances that could give rise to a likelihood

insolvency and to signal, to the debtor, the need to act without delay, such as the Minister may, on the advice

the competent authority, from time to time prescribe by regulations made under this Act. Power

the Minister to make regulations. PRE-INSOLVENCY Availability

information about early warning tools. 4. The competent authority shall be responsible to develop and maintain relevant and up-to-date information about the availability

early warning tools, as well as about the preventive restructuring procedures available in terms

this Act, which information shall be publicly available in such manner as the competent authority shall deem fit and appropriate for the intended purpose. Duties

ficials

the debtor to monitor early warning signs

insolvency. 5. The

ficials

the debtor shall, by reference to early warning tools and any other information reasonably available to them, continuously monitor developments that may expose the debtor to a likelihood

insolvency and, where such developments are identified, take appropriate countermeasures with a view to preventing insolvency and ensuring business viability: Provided that this article shall not prejudice the provisions

any other law intended to regulate the conduct

the

ficials

the debtor including but not limited to instances where they knew, or should have known, that there were no reasonable prospects

avoiding the insolvency

the debtor. Duties

the

ficials when debtor is exposed to likelihood

insolvency. 6.

ficials

the debtor become aware that the debtor has become exposed to a likelihood

insolvency, either as a result

: (a) the information and data made available by virtue

the early warning tools; or (b) debtor; or any financial review made by the auditors

the (c) any request by a creditor or creditors, or the representative

the debtor’s employees, or a debenture or equity holder to consider its financial position; or (d) prevailing circumstances that otherwise expose the debtor to the likelihood

insolvency, the

ficials shall forthwith, and in any event, not later than thirty

the

ficials, for the purpose

reviewing the debtor’s position and

determining what steps should be taken to deal with the situation, having regard to the interests

the creditors, equity holders, employees, and other stakeholders

the debtor, and including, but not limited to, consideration as to whether the debtor should consult with an insolvency practitioner and, or,make a preventive restructuring application in terms

article 9.     

sub-article

such documentation in the manner set out in article 13

the Commercial Code. PRE-INSOLVENCY

a meeting in terms

sub-article

the financial matters

the debtor and the determination made, and shall be kept at the debtor’s

fice.

sub-article

sub-article

the debtor may, notwithstanding anything contained within the constitutive instruments

the debtor or any instruments ancillary thereto, obstruct, directly or indirectly, the

ficials

the debtor from taking any action lawfully attributable to them in terms

this Act. Equity holders. PART III ENTRY INTO PREVENTIVE RESTRUCTURING PROCEDURE 8. Where a debtor has, or the

ficials

the debtor have, whether by reference to article 6, or otherwise, reasonably determined that the debtor is exposed to a likelihood

insolvency, having regard to the debtor’s business circumstances and its actual, contingent, and prospective assets and liabilities, a preventive restructuring application may be made to the Court requesting it to place the debtor under a preventive restructuring procedure, provided that the debtor: Eligibility for preventive restructuring. (a) has reasonable prospects

viability, that is to say the debtor’s economic viability is likely to be preserved or restored as a result

being placed under a preventive restructuring procedure; (b) has not become liable for the payment

a debt that has remained unsatisfied, in whole or in part, after twentyfour

an executive title against the debtor by any

the executive acts specified in article 273

the Code

Organization and Civil Procedure, or has been otherwise declared by a court to be unable to pay its debts; and        (c) has not previously been admitted to preventive restructuring procedures in the three

the application. 9.

an application to the Court, to be made or endorsed by an insolvency practitioner.

article 13, be designated Types

preventive restructuring procedures. PRE-INSOLVENCY as the insolvency practitioner responsible to assist the debtor in the preventive restructuring procedure, and all the obligations

an insolvency practitioner as applicable in terms

this Act shall apply to the said insolvency practitioner for so long as the insolvency practitioner shall remain so appointed.

the following specific types

preventive restructuring procedures: (a) a standard preventive restructuring procedure for the formulation

a restructuring plan in accordance with the requirements

the Second Schedule, and to be submitted for adoption by the affected parties in terms

Part VI

; (b) a pre-formulated preventive restructuring procedure, for the submission

a restructuring plan formulated in accordance with the requirements

the Second Schedule, for adoption by the affected parties in terms

Part VI

; or (c) a pre-approved preventive restructuring procedure, for the confirmation

a restructuring plan formulated in accordance with the requirements

the Second Schedule, that has already attained the necessary approval for adoption by the affected parties in terms

article 41 or 42. Contents

application. 10. The insolvency practitioner making or endorsing, as the case may be, the application referred to in article 9

the debtor’s business and the manner in which it is operated, and a statement

the full facts, circumstances and the causes which have led the debtor to becoming exposed to a likelihood

insolvency; (b) a statement as to previous restructuring procedures entered into by the debtor and the outcome

such procedures; (c) a reasoned statement on the debtor’s prospects

economic viability, having regard also to the debtor’s actual, contingent, and prospective assets and liabilities, and including consideration as to how preventive restructuring may reasonably eliminate or substantially reduce the debtor’s likelihood

insolvency, and enable the debtor’s economic viability to be preserved or restored; (d) audited financial statements, or management accounts if audited financial statements are not available, for the last two

time, for such shorter period, and made up to not less than thirty

the application; (e) a statement

the debtor’s assets and liabilities, made up to a date not earlier than two

the application, including a value attributed to the listed assets and liabilities in the reasoned opinion

the

ficials

the debtor; (f) a list

the creditors

the debtor, containing the names, addresses, and electronic mail addresses thereof, together with an indication

the amount due to each

such creditors and the security, if any, enjoyed by the respective creditors; (

1. g)a preventive restructuring filing declaration made out in the form set out in the First Schedule; (
2. h)if the debtor is applying for admission to standard preventive restructuring: (
3. i)a statement as to how the mechanisms made available to the debtor in terms

standard preventive restructuring procedures may enable the financial and economic situation

the debtor to be improved in the interests

its creditors, equity holders, employees, other stakeholders and, if applicable, the debtor himself as a viable going concern; and (ii) an identification

any essential executory contracts

the debtor; (

1. i)if the debtor is applying for admission to preformulated preventive restructuring: (
2. i)a restructuring plan, prepared in accordance with the requirements

the Second Schedule, to be submitted for the approval

the affected parties; (ii) if available, written confirmation

the contingent approval

the restructuring plan submitted for adoption by the affected parties in terms

subparagraph (i), by the approving affected parties; and (iii) an identification

any essential executory contracts

the debtor; (

1. j)if the debtor is applying for admission to preapproved preventive restructuring: PRE-INSOLVENCY (
2. i)a restructuring plan, prepared in accordance with the requirements

the Second Schedule, that has been adopted by the affected parties, so that it may be submitted to the Court for confirmation in terms

article 41; (ii) written confirmation

the approval

the restructuring plan submitted for adoption by the affected parties in terms

sub-paragraph (i), by the approving affected parties; and (iii) appropriate supporting documentation and statements, where applicable, as may be necessary so as to evidence that the restructuring plan has satisfied the criteria for a cross-class cram-down in terms

article 42. Hearing

application and issue

preventive restructuring order. 11.

an application, which shall take place within not more than thirty

the application, the Court may, after examining all the circumstances and the options that are available, either dismiss the application or issue a preventive restructuring order, acceding thereto and placing the debtor under the requested preventive restructuring procedure.

article 10; (b) that the type

preventive restructuring being requested is suitable to the circumstances

the debtor and its creditors; and (c) that the issuing

the preventive restructuring order would, in the event

an application for a standard or preformulated preventive restructuring procedure, be likely to facilitate the confirmation

a restructuring plan that satisfies the requirements

article 43

the creditors, equity holders, employees, and other stakeholders

the debtor. Notification

the preventive restructuring order. 12.

sub-article 10(f), the competent authority, and the Registrar

Courts

the issue

a preventive restructuring order in terms

this Part, without undue delay, at the PRE-INSOLVENCY expense

the debtor.

the issue

the order on a website maintained by the competent authority for this purpose, not later than fourteen days

the order. 13.

the debtor may, at any time, make an application to the Court for the appointment

an alternative insolvency practitioner, where the creditor: (a) has reasonable grounds to believe that the insolvency practitioner is subject to a conflict

interest or is otherwise unable to perform the functions thereof impartially; or (b) is

the opinion that the insolvency practitioner does not have the specific competence, experience, or resources required to adequately participate in the preventive restructuring procedures.

sub-article

the proposed alternative insolvency practitioner, that he is available and prepared to participate in the preventive restructuring procedures in terms

the preventive restructuring order; (

1. b)a preventive restructuring filing declaration made out in the form set out in the First Schedule; and (
2. c)the written confirmation

not less than fifty per cent (50%)

the debtor’s creditors as listed in article 10(f), by reference to both the number

individual creditors and the economic value

their claims, that such creditors approve

the appointment

the alternative insolvency practitioner.

sub-article

this article and shall issue an order immediately terminating the appointment

the insolvency practitioner and confirming the appointment

the alternative insolvency practitioner: Provided that the Court shall cause a copy

the order to be delivered to the Registrar

Courts and the competent authority, and the latter shall be required to determine what action, if any, may be warranted in the circumstances with respect to the insolvency practitioner.

an application in terms

this article shall not Appointment

alternative insolvency practitioner. PRE-INSOLVENCY have any suspensive or negatory effect on the debtor’s status as being under preventive restructuring procedures, or on the protections granted to the debtor by virtue

being admitted to preventive restructuring procedures, or on any action taken by the insolvency practitioner prior to the date

issue

the order referred to in subarticle

a preventive restructuring procedure, the insolvency practitioner is no longer able to execute the responsibilities imposed in terms

this Act, whether as a result

resignation, interdiction, incapacitation, death, or otherwise, the debtor shall, within forty-eight

becoming aware

such fact, by application to the court, request the appointment

an alternative insolvency practitioner: Provided that this application shall, mutatis mutandis, comply with the requirements

sub-articles

the Court, from taking any action, the performance

which shall require the involvement

the insolvency practitioner in terms

this Act or as the Court may otherwise stipulate in the preventive restructuring order issued in terms

article 11, until a new insolvency practitioner has been confirmed by the Court. Effect

the preventive restructuring order. 14.

an application and until the earlier

the dismissal

the application, or the termination

the preventive restructuring order: (a) any obligation incumbent on the debtor to make an application for the opening

proceedings that may result in a judgement declaring the bankruptcy

the debtor, or the dissolution or winding up

the debtor in terms

law, shall be suspended; (b) any act or proceedings that may result in a judgement declaring the bankruptcy

the debtor, or the dissolution or winding up

the debtor in terms

law, shall be stayed; and (c) no new act or proceedings that may result in a judgement declaring the bankruptcy

the debtor, or the dissolution or winding up

the debtor in terms

law, shall be taken or commenced against the debtor.

ficio upon becoming aware that a preventive restructuring order is in force. PRE-INSOLVENCY PART IV GENERAL PROVISIONS ON PREVENTIVE RESTRUCTURING PROCEDURE 15.

a preventive restructuring procedure, the debtor shall not, without the prior approval

the insolvency practitioner: (a) terminate the employment

any employees

the debtor on the basis

redundancy; (b) sell or in any way dispose

, or encumber by providing as security, any assets or property

the debtor; or (c) enter into any long-term commitment: Provided that for the purposes hereof, a long-term commitment shall mean any contractual commitment for a duration

longer than six

a previous contractual commitment, shall be considered as a continuation

the previous contractual commitment if the obligations being contracted are substantially the same.

a preventive restructuring procedure, a creditor or creditors

the debtor, or an employee representative

the debtor ’s employees, may request that the insolvency practitioner provide them with information regarding the activities being carried on by the debtor in the course

the preventive restructuring procedure, and the extent to which progress has been made on the negotiation

a restructuring plan.

a request made in terms

sub-article

such information is, at the discretion

the insolvency practitioner, reasonable in view

the person’s interest in the preventive restructuring procedure, and only if the provision thereof would not be prejudicial to the preventive restructuring procedure.

a preventive restructuring procedure, the debtor, or the insolvency practitioner with the consent

the debtor, or both, may consult with any interested party, including any creditor or creditors or employee representative

the debtor’s employees, with respect to any proposed actions to be taken with the intention

restoring the debtor’s economic viability or negotiating a restructuring plan. Normal activities

the debtor and creditor participation. PRE-INSOLVENCY Claims that may form part

a restructuring plan. 16.

a preventive restructuring procedure may propose to restructure claims, whether secured or unsecured, that: (a) are lawfully enforceable against the debtor at the time

the submission

the restructuring plan; and (

1. b)arise from: (
2. i)contractual arrangements, including debts that are contingent upon the occurrence

future circumstances or that have otherwise not yet become due; (ii) shares, equity or other ownership rights in the debtor, including sums due by way

dividends, profits or otherwise; (iii) taxes due by the debtor in Malta, excluding taxes levied on consumption such as value added taxes, and excluding taxes due which have been withheld or otherwise collected by the debtor on behalf

any authority or government agency; or (iv) any other claims that the Court may, upon the application

the interested creditor, order to be included within the restructuring plan: Provided that the restructuring plan may not, under any circumstances, purport to include, or affect the ranking

, claims arising in connection with:    (a) wages due by the debtor and constituting a privileged claim over the assets

the debtor in terms

article 20

the Employment and Industrial Relations Act; (b) civil debts due by the debtor exclusively by way

damages in tort; and (c) any fine (ammenda or multa) due by the debtor in terms

Maltese law.

such measures shall be without prejudice to any requirement

the relevant party to discuss, or notify the measures with, or to, the respective workers, or representatives thereof, as the case may be, as may arise in terms

law or in terms

any collective agreement.

a restructuring plan in a manner contrary to the provisions

this article, shall be null and void.

the debtor, any right

termination, or any right to accelerate, modify, withhold or suspend the performance

its obligations in favour

the debtor, or any right to repossess any property leased, sold or granted to the debtor, solely by virtue

the debtor’s commencement

the preventive restructuring procedure or any procedure in the course thereof, shall be null and void. 17.

affected parties. (

1. a)the claims excluded from the restructuring plan would be reasonably expected to be settled in full, should the restructuring plan not be confirmed; or (
2. b)the exclusion is justified in the context

the economic realities

the debtor, particularly where the included debt is secured against assets

the debtor.

any claims in terms

this article must be explained in sufficient detail within the restructuring plan and the Court must be satisfied that the proposed exclusion is compatible with the object and purpose

this article and would not result in unfair prejudice to any excluded creditor.

claims that have not been excluded from the restructuring plan in terms

this article shall be deemed to be affected parties for the purposes

the restructuring plan and otherwise for the purposes

this Act. 18.

secured claims; (b) holders

unsecured claims; (c) holders

claims for the payment

wages not constituting a privileged claim over the assets

the debtor in terms

article 20

the Employment and Industrial Relations Act; (d) holders

subordinated claims, meaning claims that, in the event

the liquidation

the debtor’s assets, would remain unpaid until the full settlement

all non-subordinated debts

the debtor; and Treatment

affected parties in classes.    PRE-INSOLVENCY (e) holders

shares, equity or other ownership rights in the debtor.

affected parties, have particular regard to the protection

vulnerable creditors, such as workers and small suppliers, and shall also organise a vulnerable creditors’ class, or classes, if the insolvency practitioner considers this to be necessary for the protection

the vulnerable creditors.

different legal priority in the event

the liquidation

the debtor’s assets.

affected parties should be clearly distinguished from one another, and the criteria used to distinguish between affected parties must be clearly specified within the restructuring plan. Equal treatment

affected parties. 19.

a specific class shall be treated equally for the purposes

the restructuring

their claims within the scope

the restructuring plan, except insofar as any detrimental treatment is expressly agreed to by the affected parties to whom such differentiation shall apply.

the preceding sub-article, the restructuring plan shall be accompanied by an express statement, in writing, by each

the affected parties to the detriment

whom the differentiation in treatment shall apply.

a restructuring plan or otherwise in connection with the preventive restructuring procedures, shall be null and void. Protection

new and interim financing. 20.

article 31, or any new financing forming part

a restructuring plan that is duly confirmed in terms

this Act, shall, in the case

any subsequent insolvency proceedings in respect

the debtor: (

1. a)not be declared void, voidable, or unenforceable; PRE-INSOLVENCY (
2. b)not constitute a basis for any claim or allegation

wrongful trading or fraudulent preference, in terms

the Companies Act, that may be brought against the debtor; and (c) the grantors

such new or interim financing shall not, notwithstanding anything to the contrary contained in any other law, incur liability on the grounds that such financing is detrimental to the creditors

the debtor: Provided that the provisions

this sub-article shall not, in any way, limit the entitlement

a creditor to bring an action on the basis

article 1144

the Civil Code.    Cap. 386.            

this article, shall be null and void. 21.

a restructuring plan in the course

preventive restructuring procedures, or for the implementation

a restructuring plan that has been confirmed in terms

this Act, including, without limitation, fees and costs incurred for: Protection

restructuring related transactions. (a) the negotiation, adoption, or confirmation

a restructuring plan; (b) the provision

professional advice closely connected with the restructuring; (c) the payment

workers’ wages for work already carried out; and (d) any other payments or disbursements made in the ordinary course

the debtor’s business, shall, in the case

any subsequent insolvency proceedings in respect

the debtor, not be declared void, voidable, or unenforceable, or constitute a basis for any claim or allegation

wrongful trading, or fraudulent preference in terms

the Companies Act, that may be brought against the debtor:     Provided that the provisions

this sub-article shall not, in any way, limit the entitlement

a creditor to bring an action on the basis

article 1144

the Civil Code.   

an insolvency practitioner, as well as any expenses incurred or disbursements made by the insolvency practitioner in the exercise

its functions, shall represent a privileged claim over the assets

the debtor, which, notwithstanding anything contained in any other law, shall be paid with priority to all other secured or unsecured debts

the debtor.  PRE-INSOLVENCY

expenses and remuneration

the insolvency practitioner.

the expenses and remuneration

the insolvency practitioner are paid in terms

regulations made in terms

sub-article

this article, shall be null and void. Holding

meetings. 22.

the debtor or any instruments ancillary thereto, any meeting convened or held in terms

this Act may be validly held remotely in accordance with this article: Provided that where a meeting is not held remotely, any person entitled to be present at the meeting may still attend such meeting remotely, and all

the requirements applicable to the holding

a remote meeting in terms

this article shall apply in the interest

those persons attending remotely.

the insolvency practitioner to ensure that sufficient technological means are available, at the place

the meeting, to enable any persons attending the meeting remotely to effectively follow and participate in the discussion.

a proxy shall be in writing and may be recorded electronically, and proof

such appointment shall be provided to the insolvency practitioner prior to the meeting.

this Act shall be in writing and may be transmitted by means

electronic mail, by not later than seven

doubt, may also attend the meeting remotely; (

1. c)details regarding the means to be used to attend the meeting remotely; and PRE-INSOLVENCY (
2. d)the procedure regulating how any person entitled to attend may participate in the discussion. 23.

a preventive restructuring procedure, the insolvency practitioner may, with the sanction

the debtor and a majority in value

all the affected parties, seek the appointment

a mediator in terms

the Mediation Act, to facilitate negotiations between the debtor and the affected parties towards the formulation

a restructuring plan.

a mediator in terms

this article shall not affect the application

the other provisions

this Act and in the event

any inconsistency between this Act and the Mediation Act, the provisions

this Act shall prevail. 24. If two or more applications for preventive restructuring are brought before the Court, that are connected in respect

the subjectmatter thereof, or if the decision on one might affect the decision on the other, the Court may order that the several proceedings be heard and deliberated upon simultaneously. Appointment

a mediator.      Cap. 474.     Connection

proceedings. PART V PREVENTIVE RESTRUCTURING PROCEDURE TITLE I: STANDARD PREVENTIVE RESTRUCTURING PROCEDURE 25.

an application requesting that the Court place the debtor under standard preventive restructuring procedure and unless it is dismissed, and, in the event that the Court accedes to the request and issues an order to place the debtor under standard preventive restructuring procedure, for a period

four

the application: (a) the execution

claims

a monetary nature against the debtor, with the exclusion only

workers’ claims, and any interest that may otherwise accrue thereon, shall be stayed; (b) in respect

essential executory contracts entered into prior to the order to place the debtor under preventive restructuring procedure, no party may exercise, to the detriment

the debtor, any right

termination, or any right to accelerate, modify, withhold or suspend the performance

its obligations in favour

the debtor, or any right to repossess any property leased, sold or granted to the debtor, solely by virtue

the fact that they were not paid by the debtor, or by virtue

the debtor’s entry into preventive restructuring procedure; Stay

individual enforcement actions.   PRE-INSOLVENCY (c) no precautionary or executive act or warrant mentioned in the Code

Organization and Civil Procedure shall be made or continued against the debtor or any property

the debtor, including any warrant in terms

article 312

the Code

Organization and Civil Procedure; (d) no arbitration proceeding shall be made or continued against the debtor or any property

the debtor; and (e) notwithstanding anything contained in this subarticle, no judicial proceedings shall be commenced or continued against the debtor or its property, and any relevant court shall refuse any new judicial action against the debtor or shall ex

ficio order that ongoing judicial proceedings against the debtor are stayed.

paragraph (d) or (e)

sub-article

claims in terms

paragraph (a)

sub-article

ficio upon becoming aware that a preventive restructuring application has been made and has not been dismissed, or a preventive restructuring order is in force.

sub-article

the protections granted to the debtor in terms

sub-article

sub-article

the

ficials

the debtor; (

1. b)the insolvency practitioner; or (
2. c)any creditor or creditors, provided that it is proven to the satisfaction

the Court: (i) that the protections granted no longer fulfil the objective

supporting negotiations on a restructuring plan; (ii) that the protections granted shall cause substantial harm or financial distress to the creditor; (iii) that the protections granted shall cause the creditor or class

creditors to be unfairly prejudiced in respect to any other creditor or class

creditors; or (iv) that, where the creditor is asking the Court to lift the protection granted in terms

sub-article PRE-INSOLVENCY

sub-article

individual enforcement actions. any action in rem against a ship or sea vessel; any action in rem against an aircraft or aircraft (c) any proceedings that may be instituted by the holder

a registered mortgage or a privileged creditor over a ship or sea vessel, or any other actions or proceedings to which a ship or sea vessel may be subject in terms

the Merchant Shipping Act;      (d) any proceedings that may be instituted by the holder

a registered mortgage or a privileged creditor over an aircraft or aircraft engine, or any other actions or proceedings to which an aircraft or aircraft engine may be subject in terms

the Aircraft Registration Act;      (e) any warrant

arrest, whether in personam or in rem,

a sea-going vessel; (f) any warrant

arrest, whether in personam or in rem,

an aircraft or aircraft engine; (g) any warrant

seizure

a commercial going concern in terms

article 848A

the Code

Organization and Civil Procedure;   (h) any action to be brought in respect

a right stated in any

the foregoing warrants, in terms

article 843

the Code

Organization and Civil Procedure; and   (i) any rights

a securitisation creditor as defined in the Securitisation Act.  26.

the debtor and rank all claims against the debtor, present or future, certain or contingent, ascertained or which may be due in damages, by reference to the priority and ranking

their debts in accordance with the law being in force at the time.

the claims against the debtor in terms

sub-article

the

ficials

the debtor, for the purpose

: (a) laying before them for their information, review Ranking

claims and formation

classes. PRE-INSOLVENCY and confirmation, a comprehensive ranking

the claims against the debtor; (b) discussing which claims are to be selected for inclusion within the scope

a restructuring plan, having regard to the provisions

article 17; and (c) organising the said creditors, into classes formed, having regard to the provisions

article 18. Review

ranking

claims and formation

classes by creditors. 27.

the creditors

the debtor, for the purpose

: (a) laying before them for their information and review, a comprehensive ranking

the claims against the debtor; (b) laying before them for their information and review, a list

the affected parties and the classes into which the affected parties have been organised; and (c) allowing the creditors to request further information as to the financial situation

the debtor and the expectations

the debtor with respect to the outcome

preventive restructuring.

the holding

the meeting

the creditors

the debtor, and the insolvency practitioner may also send a copy

the notice convening the meeting to any

ficials

the debtor or other persons as may be relevant to the content

the meeting.

the meeting

the creditors in two

the debtor, not later than seven

the meeting: Provided that the notice to be published in a newspaper may, subject to the alignment

the applicable time-periods, be comprised within the notice to be published in terms

article 12

creditors in terms

this article shall also be given to known creditors residing or based abroad. Objection to ranking

claims and formation

classes. 28.

claims and the formation

classes, in writing, to the insolvency practitioner within twenty

the meeting held in terms

article 27: PRE-INSOLVENCY Provided that a failure to object to the proposed ranking

claims shall not constitute the acceptance, by the affected party,

the ranking

claims for purposes external to the preventive restructuring proceedings, including but not limited to subsequent insolvency proceedings.

claims and the formation

classes, and shall revise the ranking

claims and the formation

classes as it may deem necessary in discussion with the

ficials

the debtor, and shall notify any revisions to the affected parties.

claims and the formation

classes in terms

sub-article

a restructuring plan by the Court, as contemplated in article 43

any required revisions on the affected parties, convene another meeting

the creditors

the debtor in terms

, and in accordance with the requirements

article 27. Power to reconvene creditors meeting. 30.

ficials

the debtor shall, in consultation with the insolvency practitioner, review any executory contracts that have been entered into by and between the debtor and any counterparty, and the performance

which has not been concluded, and shall evaluate the termination or re-negotiation

any such executory contracts as shall be conducive to the economic viability

the debtor: Termination or renegotiation

contracts. Provided that, where the debtor is a natural person, only executory contracts entered into for the furtherance

the debtor’s trade, business, craft or profession may be considered for the purposes

this article: Provided further that the re-negotiation and termination

contracts

employment shall, notwithstanding anything contained in this Act, continue to be regulated by the rules set out within the Employment and Industrial Relations Act or other pertinent legislation.

an executory contract would benefit the debtor’s prospects

economic viability, the insolvency practitioner may invite the counterparty or counterparties to engage in bona fide negotiations with the debtor, for the purpose

reaching a mutual agreement as to the renegotiation or termination

the executory contract.

the respective executory contract, the debtor may propose to unilaterally terminate the executory contract      PRE-INSOLVENCY as part

the restructuring plan submitted for confirmation in terms

Part VI

an executory contract shall render the debtor liable only to compensate the counterparty for losses incurred, if any, as a result

the unilateral termination, or as may otherwise be determined in accordance with regulations to be made by the Minister, and a claim for such losses may be immediately included within the restructuring plan: Provided that the insolvency practitioner shall notify any consequential revisions to the ranking

claims or the formation

classes to the

ficials

the debtor and to the affected parties, in writing and without undue delay.

the restructuring plan, any unilateral termination

any executory contract as contemplated therein, shall, except where a longer period is stipulated within the restructuring plan, take effect automatically upon the earlier

: (a) the lapse

three

the confirmation

the restructuring plan, notwithstanding any appeal that may be filed against the confirmation

the restructuring plan; or (b) where the executory contract provides for a notice period shorter than three

this article shall not allow a debtor to propose the unilateral termination

an executory contract where the termination would result in the non-enforcement

any close-out netting provision or any other provision in any contract providing for or relating to the set-

f or netting

sums due from each party to the other in respect

mutual credits, mutual debts or other mutual dealings. Acquisition

interim financing. 31.

ficials

the debtor shall, in consultation with the insolvency practitioner, review whether the procurement

interim financing shall be necessary in order to preserve the economic viability

the debtor until the confirmation

a restructuring plan.

ficials

the debtor may solicit proposals from third parties willing to provide the debtor with interim financing, and shall forward any proposals they are desirous

accepting to the insolvency practitioner, including any terms pursuant to which the interim financing is proposed.

interim financing is necessary in order to preserve the economic viability

the debtor until the confirmation

a PRE-INSOLVENCY restructuring plan and that the acceptance

the proposed terms would not infringe any provisions

this Act, the insolvency practitioner shall: (a) if the proposed interim financing is unsecured, approve the acquisition

the interim financing; or (b) if the proposed interim financing is secured, convene a meeting

the affected parties, or classes thereof, that would be adversely impacted by the acquisition

the proposed secured interim financing, for the purpose

laying before them, and holding a vote on, the proposed terms for the acquisition

secured interim financing.

sub-article

the meeting, and the insolvency practitioner shall also send a copy

the notice convening the meeting to any

ficials

the debtor.

secured interim financing shall be approved subject to the agreement

not less than fifty per cent (50%)

the affected parties in each class, by reference to the value

the claims represented thereby.

this article shall be acquired by the debtor and the claim for repayment thereof may be immediately included within the restructuring plan, provided that the repayment

interim financing shall, in all cases, not be subject to any reduction within the scope

a restructuring plan.

claims or the formation

classes to the

ficials

the debtor and to the affected parties, in writing and without undue delay. 32.

ficials

the debtor shall, in consultation with the insolvency practitioner, formulate a restructuring plan prepared in accordance with the requirements

the Second Schedule, to be submitted for adoption by the affected parties: Provided that any creditor

the debtor may also prepare a restructuring plan, or proposals for inclusion within a restructuring plan, and submit these to the insolvency practitioner for the consideration

the debtor.

a restructuring plan, the insolvency practitioner may, at the request

the debtor, invite an affected party, or class

affected parties, to engage in bona fide discussions with the debtor in connection with any restructuring proposals that the insolvency practitioner, upon consultation with the debtor, may consider to be appropriate for inclusion within the Formulation

the restructuring plan. PRE-INSOLVENCY restructuring plan, for the purpose

hearing the views

the affected parties.

this article may, subject to the agreement

the debtor, be submitted by the insolvency practitioner for adoption by the affected parties in terms

Part VI

this Act, provided that it is reasonably apparent that: (a) affected parties with a sufficient commonality

interest in the same class are treated equally, and in a manner proportionate to their claim; and (b) any new financing proposed in the restructuring plan is necessary to implement the restructuring plan and does not unfairly prejudice the interests

the affected parties. Duration

standard preventive restructuring. 33.

four

the application filed in terms

article 9, provided that the duration

standard preventive restructuring may be extended in terms

this article until a maximum

twelve

the application.

the previous order, file an application to the Court to extend the order for a further period

four

the debtor: Provided that the application may also request that the stay

individual enforcement actions in terms

article 25 be extended, in whole or in part, for a further period

four

the order, or until the termination

the preventive restructuring order in terms

article 34, whichever is earlier.

individual enforcement actions, as well as the reasons for which an extension would be reasonably justified in the context

the financial and economic situation

the debtor and the interests

his stakeholders.

the automatic termination

the order, issue a decision on whether to extend the preventive restructuring procedure and, where applicable, whether to also extend the stay

individual enforcement actions: Provided that the Court shall only renew the stay

individual enforcement actions if it is satisfied that the renewal would be reasonable, having regard to the debtor’s prospects

economic PRE-INSOLVENCY viability, the interests

the affected parties, and the likelihood that a renewal would facilitate the successful negotiation and confirmation

a restructuring plan, and would generally not be unduly prejudicial to the interests

the affected creditors.

preventive restructuring procedure to the affected parties, the competent authority and the Registrar

Courts, at the expense

the debtor, without undue delay. 34.

ficials

the debtor, the affairs

the debtor have improved to the extent that the debtor is no longer exposed to a likelihood

insolvency; (b) that, after consulting with the

ficials

the debtor, the affairs

the debtor have deteriorated to the extent that the debtor does not have reasonable prospects

economic viability; or (c) that, after consulting with the

ficials

the debtor and any creditors

the debtor as the insolvency practitioner may deem reasonably appropriate, the insolvency practitioner has established that a significant proportion

the debtor’s creditors do not support the continuation

negotiations and shall prevent the debtor from obtaining the approvals necessary for the confirmation

a restructuring plan, the insolvency practitioner shall forthwith make a request by application to the Court for the termination

the preventive restructuring procedure, containing detailed and comprehensive reasons therefor.

ficials

the debtor, if they are satisfied that the affairs

the debtor have improved to the extent that the debtor is no longer exposed to a likelihood

insolvency or convinced that the affairs

the debtor have deteriorated to the extent that the debtor does not have reasonable prospects

economic viability, may submit a request by application to the Court confirming that they are so satisfied or convinced, and requesting that the Court issue an order for the termination

the preventive restructuring procedures, provided that the Court shall not without just cause proceed to make an order acceding to or declining the application without having first heard the insolvency practitioner, insofar as reasonably possible.

standard preventive restructuring. PRE-INSOLVENCY restructuring order is in force, any creditor or creditors

the debtor, if they believe that there would be no purpose to the continuation

standard preventive restructuring procedures on the basis: (a) that the debtor is no longer exposed to a likelihood

insolvency or no longer has reasonable prospects

economic viability; or (b) that a significant proportion

the debtor’s creditors do not support the continuation

negotiations and shall not provide the approvals necessary for the confirmation

a restructuring plan, may, after informing the insolvency practitioner, submit an application to the Court requesting it to issue an order for the termination

the preventive restructuring procedures, provided that the Court shall not proceed to make an order acceding to or declining the application without having first heard the insolvency practitioner, insofar as reasonably possible.

a standard preventive restructuring order in terms

this article, it shall make such provisions and conditions, as it may consider necessary in the circumstances

the case. TITLE II: PRE-FORMULATED PREVENTIVE RESTRUCTURING PROCEDURE Common applicability

provisions. 35. The provisions

articles 25, 30 and article 34, as applicable to a standard preventive restructuring procedure shall, mutatis mutandis, apply to a pre-formulated preventive restructuring procedure. Approval

terms

pre-formulated restructuring plan. 36.

the terms

a pre-formulated restructuring plan, the insolvency practitioner may, at the request

the debtor, invite an affected party, or class

affected parties, to engage in bona fide discussions with the debtor in connection with the pre-formulated restructuring proposal, for the purpose

hearing the views

the affected parties.

the debtor, be submitted by the insolvency practitioner for adoption by the affected parties in terms

Part VI

this Act, provided that it is reasonably apparent that: (a) affected parties with a sufficient commonality

interest in the same class are treated equally, and in a manner proportionate to their claim; and (b) any new financing proposed in the restructuring plan is necessary to implement the restructuring plan and does not unfairly prejudice the interests

the affected parties. PRE-INSOLVENCY 37. The preventive restructuring order placing the debtor under pre-formulated preventive restructuring shall automatically terminate upon the lapse

four

the application filed in terms

article 9. Duration

preformulated preventive restructuring. 38.

preformulated preventive restructuring procedure into standard preventive restructuring procedure. (a) after consulting with the

ficials

the debtor, the economic viability

the debtor is more likely to be preserved or restored if it is placed under standard preventive restructuring procedure; or (b) after consulting with the creditors

the debtor, a significant proportion are not in favour

the pre-formulated restructuring plan, such as is likely to prevent the debtor from obtaining the approvals necessary for the confirmation thereof, and the insolvency practitioner is

the view that standard preventive restructuring is more likely to result in the successful negotiation and confirmation

a restructuring plan.

sub-article

articles 10(

1. a)to 10(g), and article 10(i)(iii), that, following the initial submission thereof, requires update or revision; and (
2. b)a statement in terms

article 10(h)(i), which should also include details as to how the conversion

the preformulated preventive restructuring procedure into standard preventive restructuring procedure shall improve the debtor’s likelihood

preserving or restoring its economic viability.

determining the maximum duration

any stay

individual enforcement actions in terms

article 25

the order placing the debtor under standard preventive restructuring in terms

article 33

RESTRUCTURING PLAN Affected parties to vote on adoption

restructuring plan. 39.

this Act, other than a pre-approved restructuring plan that has already attained the written approval

the affected parties as necessary for the purposes

confirmation in terms

article 41 or 42, shall be submitted for adoption at a meeting

the affected parties to be convened by the insolvency practitioner.

the holding

the meeting, and the insolvency practitioner shall also send a copy

the notice to any

ficials

the debtor: Provided that, in the event

a pre-approved restructuring proceeding, it shall be sufficient for the insolvency practitioner to provide notice to the affected parties that a pre-approved plan has attained the written approval

the affected parties as necessary for the purposes

approval in terms

articles 41 or 42, which notice shall be given not less than seven

an application to the Court for the confirmation

the restructuring plan in terms

article 41

the restructuring plan.

the restructuring plan to be submitted for adoption at the meeting, for the consideration

the affected parties, or, in the event

pre-approved restructuring proceedings, a copy

the pre-approved restructuring plan. Procedure

meeting. 40.

the restructuring plan, the affected parties shall have the opportunity to discuss the restructuring plan and request clarification on the contents thereof from the insolvency practitioner.

the restructuring plan, by show

hands, and the insolvency practitioner shall record the result

the votes taken.

their vote, for a maximum period

seven

the said seven

a vote transmitted by the affected party to the insolvency practitioner in terms

sub-article

nullity, expressly and unequivocally state whether the affected party wishes to adopt or reject the restructuring plan, and such vote may be validly submitted to the insolvency practitioner PRE-INSOLVENCY electronically.

assessing whether the restructuring plan has received the approval necessary for adoption by the affected parties in terms

article 41 or for the restructuring plan to be crammed down in terms

article 42. 41.

the affected parties in each class, by reference to the value

the claims represented thereby. Adoption

restructuring plan.

this article, the insolvency practitioner shall, without delay, file an application to the Court for the confirmation

the restructuring plan so that it may be made effective and binding on all affected parties for all purposes

law, to which the insolvency practitioner shall annex a copy

the adopted restructuring plan and proof

the adoption thereof by the affected parties, as well as the grounds, where these are expressly stated, pursuant to which any dissenting creditors have voted against the adoption

the restructuring plan. 42.

the thresholds prescribed in article 41, the restructuring plan shall notwithstanding be deemed to be adopted if, in the view

the insolvency practitioner, the restructuring plan satisfies at least the following conditions: (

1. a)the restructuring plan satisfies the best-interestof-creditors test; (
2. b)the restructuring plan will not result in any class

affected parties receiving economic value in excess

the full amount

its claims; (c) the restructuring plan ensures that any dissenting class

affected parties is treated at least as favourably as any other class

affected parties whose claims would, if the normal ranking

liquidation priorities were to be applied, rank pari passu with the claims

the dissenting class, and more favourably than any other class

affected parties whose claims would, if the normal ranking

liquidation priorities were to be applied, rank below the claims

the dissenting class; and (d) the restructuring plan has been approved for adoption by at least one

affected parties who would, if the normal ranking

liquidation priorities were to be applied, receive payment

their claims in whole or in part. Cross-class cramdown. PRE-INSOLVENCY

this article, the insolvency practitioner shall, subject to the agreement

the debtor and without undue delay, make an application to the Court for the confirmation

the restructuring plan so that it may be made effective and binding on all affected parties for all purposes

law, to which the insolvency practitioner shall annex a copy

the adopted restructuring plan and appropriate supporting documentation and statements as may be necessary so as to evidence that the restructuring plan has satisfied the criteria for adoption in terms

sub-article

the dissenting creditors and the grounds, where these are expressly stated, pursuant to which any such dissenting creditors have voted against the adoption

the restructuring plan. Confirmation

restructuring plan by the Court. 43.

receipt thereof, decide on whether to approve or reject the restructuring plan: Provided that, insofar as possible, the Court shall, before so doing, hear from the

ficials

the debtor and

any affected parties, as it may deem appropriate, by serving them with a notice

the proceedings.

ensuring that the debtor’s economic viability is preserved or restored; (b) the restructuring plan has been approved for adoption by the affected parties in accordance with the terms

this Act; (c) the formation

voting classes, and the attribution

voting rights thereto, has been performed in accordance with the terms

this Act; (d) the restructuring plan ensures that affected parties with a sufficient commonality

interest in the same class are treated equally, and in a manner proportionate to their claim; (e) any new financing proposed in the restructuring plan is necessary to implement the restructuring plan and does not unfairly prejudice the interests

the affected parties; and (f) notification

the restructuring plan has been given to all affected parties in terms

article 39.

an application for the confirmation

a restructuring plan, the Court may request any explanations or clarifications as it may consider appropriate for the formulation

its decision, which shall be provided to it, either verbally or in writing, as PRE-INSOLVENCY the Court may direct.

the restructuring plan, on the grounds

, either: (a) the failure

the restructuring plan to satisfy the best-interest-

-creditors test; or (b) a breach

the conditions for a cross-class cramdown in terms

article 42

his appointment, carry out, or cause the carrying out,

such valuations and other procedures as may be necessary or required so as to enable the expert to submit to the Court his report in writing regarding the subsistence, or otherwise,

the relevant grounds for opposition, and motivating the basis on which his conclusions are founded: Provided that the insolvency practitioner who is so appointed may, with the approval

the Court, appoint any such experts as may be deemed necessary to assist in carrying out valuations and other procedures, and any costs incurred for this process, shall, if the opposition is unfounded, be borne by the dissenting creditor, or, if the grounds for opposition are found to subsist, by the debtor.

receipt

a final report from the expert appointed in terms

sub-article

the said grounds, and the Court shall reject the restructuring plan if either

the said grounds are determined to subsist.

the restructuring plan, it shall become effective and binding on all affected parties for all purposes

law. 44.

ficials

the debtor and the affected parties, indicating the Court’s readiness to confirm the plan should those amendments be approved by a separate vote

the affected parties held in accordance with articles 41 or 42.

a restructuring plan, the

ficials

the debtor may, in consultation with the insolvency practitioner and otherwise in terms

this Act, formulate a new, or revised, restructuring plan prepared in accordance with the requirements

the Second Schedule, to be submitted for adoption by the affected parties.

rejected restructuring plan. PRE-INSOLVENCY thereof in terms

this Act, and any right to request an extension

the preventive restructuring order may be duly exercised by the competent party. PART VII APPEALS Appeals against decision

the Court.    45.

the Court within the context

a preventive restructuring procedure, including to approve or reject a restructuring plan, shall be subject to appeal to the Court

Appeal, constituted in terms

article 41

the Code

Organisation and Civil Procedure, hereinafter referred to in this article as the "Court

Appeal": Provided that the Court

Appeal may, notwithstanding that it has accepted an appeal made against the confirmation

a restructuring plan, uphold the decision

the Court to confirm a restructuring plan, and provide such remedy as necessary to ensure that the appellant is protected from the effects

the restructuring plan, or duly compensated, such that the appellant: (a) shall be entitled to receive an amount at least equivalent to that which the appellant would have been entitled to if the normal ranking

liquidation priorities were applied, or in the event

the next-best-alternative scenario, if the restructuring plan had not been confirmed; and (b) shall be treated at least as favourably as any other creditor within any class

affected parties whose claims would, if the normal ranking

liquidation priorities were to be applied, rank pari passu with the claims

the appellant, and more favourably than any other creditor within any class

affected parties whose claims would, if the normal ranking

liquidation priorities were to be applied, rank below the claims

the appellant.

sub-article

an application submitted to the Court

Appeal within twenty

the Court’s decision.

sub-article

an application submitted to the Court

Appeal within twenty

the Court’s decision: Provided that the Court

Appeal shall, before hearing such an appeal, ascertain the interest

the appellant in the decision against which the appeal has been filed.

this article shall have no suspensive effects on the execution

that decision, or on the execution

any restructuring plan approved within the preventive PRE-INSOLVENCY restructuring procedure in which that decision was made. 46.

a restructuring plan by the Court, and if the restructuring plan identifies the need to obtain the consent

a creditor prior to the transfer

any asset or assets, and, or, where the creditor is required to appear on any pertinent public deed so as to give consent to the cancellation

, or a reduction in, any cause

preference and the registration

the same, enjoyed by the creditor over the said asset or assets, the debtor may, if he is, or if the

ficials

the debtor are,

the opinion that the consent

the said creditor is, or may be withheld, make an application to the Court for the appointment

a curator. Appointment

curator to give his consent on behalf

a creditor.

this article may under the authority

the Court, give his consent to the transfer

assets and, or, appear on any pertinent public deed to consent, for and on behalf

the creditor referred to in sub-article

, or reduction in, any cause

preference, and the registration

the same, enjoyed by the said creditor, on condition that the curator receives that portion

the proceeds

the sale

assets which, in terms

law and subject to the restructuring plan, pertains to the said creditor, and which shall be applied in his favour in terms

sub-article

the creditor referred to in sub-article

the proceeds

the sale

assets referred to in sub-article

law and subject to the restructuring plan, pertains to the said creditor, and shall ensure that such funds are either distributed to the said creditor or, if this is not reasonably practicable, deposited in Court for the benefit

the said creditor. PART VIII MISCELLANEOUS 47. If at any time it appears that any actions

the debtor during a preventive restructuring order or otherwise in connection with the process

preventive restructuring, has been carried on with intent to defraud any creditor

the debtor, the Court, on the application

the insolvency practitioner or

any creditor

the debtor, may, if it thinks proper so to do, declare that any persons who were knowingly parties to the carrying on

the business in the manner aforesaid be personally responsible, without any limitation

liability, for all or any

the debts or other liabilities

the debtor as the Court may direct. Fraud. 48.

a preventive restructuring application, the issue

a preventive restructuring order, the appointment and termination

the appointment

an insolvency practitioner and the appointment

a replacement thereof, the filing

an application for the termination

a preventive restructuring order, or the order

the Court terminating the preventive restructuring procedure for any reason, the Registrar

Courts shall forthwith Filing

documents to the Registrar for registration. PRE-INSOLVENCY submit a copy

any such application, Court order or other relevant document to the competent authority.

sub-article

the restructuring plan, as may be attached to an application or order, shall not be delivered to the Registrar together with such application or order. Relationship with other laws. 49.

this Act shall not apply insofar as these may be inconsistent with, or insofar as these may be construed as limiting or restricting, the application

the following laws or instruments, or any transposing legislation, as may be amended from time to time: (a) the Convention on International Interests in Mobile Equipment and its Protocols on Matters Specific to Aircraft Equipment that was opened for signature at Cape Town on 16 November 2001, as transposed or as enforceable in terms

Maltese law; (b) Directive 98/26/EC

the European Parliament and

the Council

19 May 1998 on settlement finality in payment and securities settlement systems, as transposed in Maltese law; (c) Directive 2002/47/EC

the European Parliament and

the Council

6 June 2002 on financial collateral arrangements, as transposed in Maltese law; (d) Regulation (EU) No. 648/2012

the European Parliament and

the Council

4 July 2012 on OTC derivatives, central counterparties and trade repositories; (e) the safeguarding requirements

funds for: (i) payment institutions laid down under Directive (EU) 2015/2366

the European Parliament and

the Council

25 November 2015 on payment services in the internal market, amending Directives 2002/65/EC, 2009/110/EC and 2013/36/EU and Regulation (EU) No 1093/2010, and repealing Directive 2007/64/EC, as transposed in terms

Maltese law; and (ii) electronic money institutions laid down under Directive 2009/110/EC

the European Parliament and

the Council

16 September 2009 on the taking up, pursuit and prudential supervision

the business

electronic money institutions amending Directives 2005/60/EC and 2006/48/EC and repealing Directive 2000/46/EC, as transposed in terms

Maltese law; PRE-INSOLVENCY (f) the Financial Collateral Arrangements Regulations and any financial collateral arrangement in terms thereof;

f and Netting on Insolvency Act; (

1. h)the Merchant Shipping Act; and (
2. i)the Aircraft Registration Act. The provisions

this Act shall: (a) not apply where any applicable law creates a separate patrimony in the hands

a person or where a person is vested with ownership, has registered in his name, holds, exercises control or powers

disposition over property subject to fiduciary obligations; (b) have no impact on any accrued occupational pension entitlements. 50.

this Act, the Minister shall additionally have the power to make such regulations for the better carrying out

any

the provisions

this Act as the Minister may also, on consultation with the competent authority, deem necessary, required or appropriate to give effect to the object and purpose

the Act. Powers to make regulations.

sub-article

electronic means

communication in the course

the procedures established in accordance with this Act, including regarding: (a) the presentation

requests and applications; (b) the submission

a proposed restructuring plan, in accordance with this Act or the submission

the proposed terms

a debt agreement or bankruptcy order in accordance with the Commercial Code; (c) notifications to the creditors; (d) holding

hearings and meetings; (

1. e)voting at all hearings or meetings; and (
2. f)appeals.     the submission

contestations, objections and 51.

conflict between the Maltese text and English text

this Act, the English text shall prevail. Conflict between texts and languages. PRE-INSOLVENCY

this Act shall be made in the Maltese language and in the English language; however where in exceptional cases the use

the Maltese language would be difficult due to technical terminology, such rules or regulations may be made in the English language only. FIRST SCHEDULE – PREVENTIVE RESTRUCTURING FILING DECLARATION Preventive restructuring filing declaration A preventive restructuring filing declaration to be formulated in terms

this Act shall contain: (a) an estimation

the insolvency practitioner’s costs by way

remuneration in respect to services rendered in relation to preventive restructuring proceedings entered into in terms

this Act, including the basis upon which the estimation has been formulated; (b) a statement

the insolvency practitioner, or, in the case

an insolvency practitioner being a legal person, a statement by the principal responsible for directing the fulfilment

the engagement by the legal person, confirming that the insolvency practitioner is not subject to any conflict

interest with respect to the debtor or the debtors’ creditors or, in the event

a potential conflict

interest, the proposed measures that the insolvency practitioner intends to apply in order to prevent any risk

the conflict

interest having any bearing, on either the fulfilment

the insolvency practitioner’s responsibilities, or on the preventive restructuring; (c) a confirmation that the insolvency practitioner is lawfully authorised to act as such in terms

the Insolvency Practitioners Act and that the insolvency practitioner possesses the adequate resources so as to appropriately carry out its functions in terms

this Act, having regard to the circumstances

the debtor and its creditors.  SECOND SCHEDULE – CONTENTS

RESTRUCTURING PLAN 1. Contents

the restructuring plan: A restructuring plan formulated in terms

this Act shall contain, at minimum, the following information: PRE-INSOLVENCY (a) The name, identification number, business address, and contact information, including at least an electronic mail address,

the debtor; (b) a statement

the debtor's assets and liabilities at the time

the filing

the restructuring plan, correct up to at least one

the submission

the restructuring plan for adoption, including a value attributed to the listed assets and liabilities in the reasoned opinion

the

ficials

the debtor; (c) a description

the economic situation

the debtor including, in particular, whether it has any employees and the circumstances

such employment, and the full facts, circumstances and reasons giving rise to the requirement for an extension and, where applicable, the requirement for an extended stay

individual enforcement actions, as well as the reasons for which an extension would be reasonably justified in the context

the financial and economic situation

the debtor and the interests

its stakeholders; (d) a reasoned statement on how the restructuring plan has a reasonable prospect

preventing the insolvency

the debtor and ensuring the economic viability

the business, including the necessary pre-conditions for the success

the restructuring plan; (e) a list

the affected parties, whether named individually or by reference to the classes thereof, as well as the claims or interests covered by the restructuring plan, and including, where available, the geographical address and electronic mail address for each affected party; (f) the classes into which the affected parties have been grouped, for the purpose

adopting the restructuring plan, and the respective values

claims and interests in each class; (g) where applicable, the creditors and claims thereof, whether named individually or described by categories

debt, which have been excluded from the restructuring plan, together with a description

the reasons why such claims have been excluded, and including, where available, the geographical address and electronic mail address for every such creditor; (h) the name, identification number, business address, and contact information, including at least an electronic mail address,

the insolvency practitioner; (

1. i)the manner in which the restructuring plan proposes to restructure the debtor’s business, including, in PRE-INSOLVENCY particular: (
2. i)the measures aimed at restructuring the debtor's business that include changing the composition, conditions or structure

a debtor's assets and liabilities or any other part

the debtor's capital structure, such as sales

assets or parts

the business, the sale

the business as a going concern, as well as any necessary operational changes, or a combination

those elements; (ii) where applicable, the proposed duration

any proposed restructuring measures; (iii) the arrangements with regard to informing and consulting the employees’ representatives in accordance with applicable law; (iv) where applicable, the expected overall consequences

any proposed restructuring measures as regards employment, such as dismissals, short-time working arrangements, or similar arrangements; (v) a projection

how the confirmation

the restructuring plan would impact the debtor’s financial position, including projections covering the debtor’s expected financial position should the restructuring plan not be confirmed; (vi) any new financing anticipated as part

the restructuring plan, and the reasons why the new financing is necessary to implement the restructuring plan; (vii) the proposed management team

the debtor during and following the implementation

the restructuring plan, if confirmed; and (viii) the information which will be made available by the debtor to the affected parties following the approval

the restructuring plan, including the duration and periodicity for disclosure. 2. Annexes The following documents shall be annexed to the restructuring plan: (a) where the affected parties are to take over shares or membership rights or holdings in a legal person, the plan shall be accompanied by a waiver

pre-emption rights or any other documents as may be necessary for the transfer

shares to be permitted; PRE-INSOLVENCY (b) where a third party has assumed obligations vis-àvis the affected parties in the event

approval

the plan, the plan shall be accompanied by the third party’s statement

consent; and (c) where the restructuring plan provides for the restructuring

the rights

the affected party with regard to the priority

secured rights over the assets

the debtor, the plan shall be accompanied by a statement

consent

any parties that may be ceding priority. 3. Checklist for restructuring plans The competent authority shall be responsible to develop and maintain a comprehensive checklist for restructuring plans, adapted to the needs

small and medium-sized enterprises, which checklist shall be publicly available on a website maintained by the competent authority.