The procedure for opening the insolvency proceedings against a debtor is regulated by the provisions of the Romanian Insolvency Law no. 85/2014. There are many situations when a creditor has made such a request in bad faith only to force his debtor to pay him a debt that is not recognized. However, it should be considered that the purpose of insolvency proceedings against a legal person is to save the debtor from bankruptcy, respectively to help him to recover his business and not to pay an undue debt. A Romanian insolvent company cannot be considered a less viable company, its activity being able to be recovered due to the cooperation of all the creditors, the insolvency procedure having a collective feature. In this article you will find the conditions that a Romanian company must meet in order to be established its insolvency status, as well as the defenses that can be brought against a creditor who submits in bad faith a request for opening the insolvency proceeding. A Romanian lawyer specialized in insolvency, reorganization and bankruptcy law can give you the best advice to defend yourself against a request for opening the insolvency proceeding in Romania filed by a creditor in bad faith.
Scientific data on the insolvency proceedings in Romania
In 2021, at national level, a number of 6144 Romanian companies went into insolvency, out of which 1107 from Bucharest, 492 from Cluj, 454 from Bihor and 239 from IaÈi.
Compared to 2020, the number of the Romanian companies went into insolvency was lower by 7.9%, registering 5694 Romanian companies, of which 1286 in Bucharest, 382 in Cluj, 375 in Bihor and 183 in Iasi. In 2021, a number of 208 Romanian insolvent companies were registered in ConstanÈ›a, 37.9% less than in the previous year, when a number of 335 open proceedings were registered.
What is the insolvency procedure in Romania according to the Law no. 85/2014
According to article 5, the point 29 of the Romanian Insolvency Law no. 85/2014 regarding insolvency prevention and insolvency proceedings the insolvency is defined as a state of the patrimony which is characterized by the insufficiency of the funds available for the payment of the certain, liquid and due debts. The insolvency is presumed when the debtor does not pay his debt after 60 days from the due date, this being only a relative presumption that the debtor can debate. The insolvency is considered to be imminent when it can be proved that the debtor will not be able to pay at the due date the debts, with the available funds.
Also, according to the art. 70 the para. 1 of the Romanian Insolvency Law Law no. 85/2014 “any Romanian creditor entitled to request the opening of the insolvency proceedings provided by this title may submit an application for opening the proceeding against a debtor who is presumed to be insolvent. The term creditor mentioned in the previous text is defined by the art. 5 the para. 1 the point 20 of the Romanian Insolvency Law no. 85/2014 according to which the creditor who is entitled to introduce an application for opening the procedure is the one whose claim on the debtor’s patrimony is certain, liquid and due for more than 60 days.
The defenses that can be used by the debtor against an application for opening the insolvency proceeding in Romania filed for forcing the debtor to pay a debt appealed by the debtor.
Many creditors in Romania use this legal instrument to force the debtor to pay a debt that the debtor refuses to pay for various reasons. In this case, the creditor diverts the legitimate purpose of the insolvency proceeding, namely the recovery of the debtor’s activity, by trying to use this claim abusively, in order to threaten the debtor and to open the insolvency procedure in Romania.
The appeal of the claim of the creditor can be made by introducing the appeal against the application for opening the insolvency proceeding in Romania by the debtor, a procedure regulated by the provisions of the art. 72 of the Romanian Insolvency Law no. 85/2014. It is important to note that at the stage of solving the request for opening the insolvency proceeding in Romania, the only evidence that could be administered are the relevant documents. It is essential for the debtor to be able to submit the relevant documents proving his solvency, lists of the bank statements which shows that the debtor has the amount available, a tax certificate from the financial administration which attests the payment of taxes, the documents showing even the appeal of the claim invoked by the creditor, which would lead to the idea that the creditor does not have a certain claim. The debtor may also submit the relevant documents which shows the activities he is currently carrying out, the agreements in progress. It is important to note that the debtor must prove a sustained business activity.
An important aspect that could be used by the debtor is his prejudice by introducing the application for opening the insolvency proceeding by the creditor, in bad faith, if the debtor is well known in his business environment.
In this regards, it would be useful to appeal to a Romanian lawyer specialized in insolvency, reorganization and bankruptcy law, who can analyze if the conditions provided by the legal provisions for opening the insolvency proceeding in Romania are met and also who can advise you to make relevant defenses regarding the state of solvency.
From the analysis of the documents from the debtor’s accounting it can be proved that the request for opening the insolvency proceeding in Romania is not submitted for the legitimate purpose required by the Romanian Insolvency Law no. 85/2014, but to intimidate the debtor.
In conclusion, a debtor has a real chance of rejecting the application for opening the insolvency proceeding in Romania submitted for coercion purposes, theRomanian insolvency law specifically regulates the stages for opening the insolvency proceeding , as well as the conditions that a claim must meet in order to be invoked in this proceeding.
,,Pavel, Margarit and Associates Romanian Law Firm was ranked 2nd at national level in Insolvency, Reorganization and Bankruptcy practice area in the last 3 years. The variety of managed projects, their complexity and the training of our lawyers have led to the international recognition of the successes of the Romanian law firm “, said the Managing Partner of the Romanian law firm, Radu Pavel.
Pavel, Margarit and Associates Romanian Law Firm recommends appealing to a Romanian lawyer specialized in insolvency, reorganization and bankruptcy law, who will analyze each case, as well as the applicable legal provisions in order to identify the best solutions to obtain the rejection of the application for opening the insolvency proceeding in Romania.
Pavel, Margarit & Associates Romanian Law Firm is one of the top law firms in Romania, offering top legal advice. The Romanian law firm clients are foreign and top local companies and high worth individuals. In 2021, the success stories of the Romanian Law Firm have brought recognition from the most prestigious international guides and publications. The firm was ranked second place in Romania by the Legal 500 publication. The Romanian law firm is also recognized by IFLR 1000 Financial and Corporate Guide 2021. Pavel, Margarit & Associates Romanian Law Firm is also the only law firm in Romania recommended by the Global Law Experts Director in London in the Dispute Resolution area of Practice. All the relevant information regarding Pavel, Margarit & Associates Romanian Law Firm can be found on the website www.avocatpavel.com