Lawyer’s analysis. The Insolvency procedure explained
Corporate lawyer in Romania. What does insolvency proceedings in Romania involve?
According to the provisions of the insolvency procedure in Romania under Law 85/2014, insolvency is the state of a debtor in Romania where the available cash funds are insufficient to cover certain, liquid, and due debts. Further defining this concept, the insolvency proceedings in Romania establish two key situations indicating a lack of financial resources: the presumption of insolvency – a debtor is presumed insolvent if they fail to pay their debt to a creditor in Romania within 60 days from the due date (this presumption is relative), imminent insolvency – a debtor is deemed to be in imminent insolvency if it is proven that they will not be able to pay their due debts at maturity, given the available financial resources.
In other words, company insolvency in Romania represents the legal process through which a company that can no longer pay its debts comes under the supervision of a judicial administrator in Romania or a liquidator in Romania, with the purpose of judicial reorganization in Romania or liquidation in Romania.
Currently, insolvency procedures in Romania are regulated by Law 85/2014, which introduced significant changes compared to Law 85/2006 regarding the organization and conduct of company insolvency in Romania. Some of the key amendments include the establishment of a collective procedure for covering the debtor’s liabilities, while allowing for business restructuring in Romania when possible, the increase of the minimum threshold for initiating insolvency petition in Romania, clearer deadlines for the opening of insolvency proceedings in Romania, and the acceleration of the company bankruptcy in Romania. Additionally, unlike the previous law, the current legislation requires the debtor in Romania to notify the tax authorities before filing for insolvency in Romania.
The adoption of a new legal framework for insolvency proceedings in Romania was based on several key principles, such as: maximizing the value of assets and debt recovery in Romania; offering a viable chance for the corporate debt restructuring in Romania, either through insolvency advice in Romania or through judicial reorganization in Romania; ensuring equal treatment for creditor in Romania of the same rank; increasing transparency and predictability in insolvency proceedings in Romania; encouraging out-of-court negotiations in small business bankruptcies in Romania, such as pre-insolvency agreements; Recognizing the rights of each creditor in Romania while ensuring a clear set of rules for claims in Romania and debt collection in Romania.
Working with a litigation lawyer in Romania is essential for efficiently handling insolvency procedures in Romania, whether for judicial reorganization in Romania or bankruptcy of a company in Romania. A corporate lawyer in Romania can analyze the company’s financial situation, implement preventive measures where possible, draft and file an insolvency petition in Romania, and provide legal assistance throughout the simplified procedure in Romania. They also assist with negotiations between the debtor in Romania, the judicial administrator in Romania, and creditors in Romania, to approve a viable plan of reorganization in Romania. A litigation lawyer in Romania can also assist creditors in the insolvency procedure by drafting a request for registration at the creditors’ list, drafting a statement of claim in Romania, drafting a request for the opening of insolvency proceedings in Romania, drafting an objection to the preliminary table of claims in Romania, as well as other services to ensure the protection of creditors’ rights in the insolvency procedure for legal entities.
For creditors in Romania, protecting their financial interests is crucial in the insolvency procedure in Romania, as they aim to recover significant amounts of money. A commercial lawyer in Romania can provide assistance with drafting an insolvency petition in Romania, submitting a statement of claim in Romania, appealing other claims in Romania if necessary, and representing clients in commercial litigation in Romania. A litigation lawyer in Romania can also represent clients in the creditors’ committee, ensuring strategic decisions are made in their best interest regarding judicial reorganization in Romania or liquidation in Romania.
The Romanian law firm Pavel Mărgărit and Associates invites you to seek the expertise of an insolvency lawyer in Romania or a commerce lawyer in Romania, who can provide company insolvency advice in Romania at the highest professional standards. Our team of business solicitors in Romania has extensive experience in handling business restructuring in Romania, filing for business bankruptcy in Romania, representing creditors in Romania, and assisting with limited company liquidation in Romania.
Corporate lawyer in Romania. Stages of insolvency proceedings in Romania for a company with debts
An insolvency procedure in Romania can be initiated at the request of the debtor in Romania, creditors in Romania, or any other persons or institutions expressly provided by law. The opening of insolvency proceedings in Romania at the request of a creditor in Romania begins with an insolvency petition in Romania, which must specify the amount and legal basis of the claims in Romania; the existence of a real guarantee established by the debtor in Romania or imposed by law; the existence of precautionary measures on the debtor’s assets; and a statement regarding the possible intention to participate in the judicial reorganization in Romania, specifying how the creditor intends to be involved in the reorganization in Romania.
If the insolvency proceedings in Romania are initiated by the debtor in Romania, they must submit a request to the court within 30 days from the occurrence of the insolvency in Romania, in order to be subject to the provisions of the insolvency procedure in Romania.
The insolvency proceedings in Romania can take two forms: the general procedure or the simplified procedure in Romania. The general procedure applies to company insolvency in Romania, where the debtor in Romania, after an observation period, enters either judicial reorganization in Romania, followed by bankruptcy of a company in Romania, or directly into one of the two procedures. The simplified procedure in Romania is a type of insolvency procedure in Romania where the debtor in Romania enters liquidation in Romania immediately upon the opening of insolvency proceedings in Romania, or after an observation period of maximum 20 days, during which compliance with legal conditions is verified.
To qualify for the simplified procedure in Romania, the debtor in Romania must meet one of the following conditions: own no assets; the founding documents or accounting records cannot be found; the administrator cannot be located; the registered office no longer exists or does not match the address in the trade register.
If business restructuring in Romania is feasible and a judicial reorganization in Romania is deemed viable, a plan of reorganization in Romania may be approved by the creditors in Romania. If judicial reorganization in Romania is not possible, the company bankruptcy in Romania proceeds, and a judicial administrator in Romania or liquidator in Romania begins the sale of assets and the debt recovery in Romania process for the benefit of the creditors in Romania. This stage of the bankruptcy of a company in Romania is followed by the removal of the debtor in Romania from the relevant registration records.
The insolvency in Romania is concluded either upon the successful implementation of a judicial reorganization in Romania plan or through the wind up a company in Romania process, where the company is deregistered following limited company liquidation in Romania.
The Romanian law firm Pavel Mărgărit and Associates recommends seeking the assistance of an insolvency lawyer in Romania or a commercial lawyer in Romania, who can provide company insolvency advice in Romania, legal representation, and support for debt collection in Romania if you seek to recover a statement of claim in Romania against a company in insolvency in Romania.
Insolvency lawyer in Romania. Company insolvency in Romania vs bankruptcy of a company in Romania
Analyzing the differences between insolvency in Romania vs. bankruptcy of a company in Romania, the company bankruptcy in Romania is essentially the final stage for a company in insolvency in Romania, carried out to wind up a company in Romania by liquidating the debtor’s assets to cover liabilities and deregister the company from the Trade Register. Another distinction between insolvency in Romania and bankruptcy of a company in Romania is that company insolvency in Romania represents a financial state in which the debtor in Romania is unable to pay its debts when due to a lack of liquidity, whereas the insolvency procedure in Romania leading to liquidation in Romania is a legal process aimed at resolving the insolvency in Romania status.
A commercial lawyer in Romania or an insolvency lawyer in Romania assists a company in insolvency in Romania through the insolvency proceedings in Romania, helping to optimize the process, protect the interests of creditors in Romania, and support a judicial administrator in Romania or a liquidator in Romania in carrying out legal procedures. Collaborating with a litigation lawyer in Romania is essential at any stage for a company in insolvency in Romania, whether it is attempting reorganization in Romania or proceeding with limited company liquidation in Romania.
In Romania, companies facing financial difficulties have several legal avenues to restructure or terminate their business operations. One of the key solutions is corporate debt restructuring in Romania, which allows businesses to negotiate new repayment terms with creditors in order to regain financial stability.
For businesses unable to recover, seeking company insolvency advice in Romania is crucial. Consulting with an insolvency solicitor in Romania helps companies carry out the legal complexities of the insolvency process and determine the best course of action.
Creditors who are struggling to recover outstanding debts can pursue debt collection in Romania, which includes both amicable and legal enforcement measures. If a company can no longer meet its financial obligations, it may proceed with filing for business bankruptcy in Romania, a legal process that involves submitting a formal request to the court.
When a company reaches the point where it cannot continue operating, its owners may decide to wind up a company in Romania. This process involves liquidating the company’s assets, paying off creditors, and closing down operations in accordance with Romanian insolvency law. It is essential to be aware of the deadline for filing in Romania, as missing the required timeframe can lead to legal consequences for company directors.
Legal disputes related to insolvency often require the assistance of a commercial litigation attorney in Romania, who specializes in handling cases involving financial distress, creditor claims in Romania, and bankruptcy proceedings. Additionally, the increasing number of small business bankruptcies in Romania highlights the importance of proper financial planning and legal support for struggling enterprises.
For any business facing insolvency in Romania, working with an experienced business solicitor in Romania is crucial to ensure compliance with local laws and to explore all available options, whether restructuring, liquidation, or bankruptcy of a company in Romania.
Commerce lawyer in Romania. Documents required for company insolvency in Romania
To initiate insolvency proceedings in Romania for a company, several documents expressly required by the current regulations must be submitted. These include the latest annual financial statement, certified by the administrator and auditor; the trial balance for the month preceding the date of filing the insolvency petition in Romania; a list of the names and addresses of the creditors in Romania, regardless of whether their claims in Romania are certain or conditional, liquid or illiquid, due or undue, disputed or undisputed, specifying the amount, cause, and preference rights; a list of payments and asset transfers made by the debtor in Romania in the six months preceding the filing of the statement of claim in Romania; the profit and loss account for the year prior to the submission of the request; a list of members of the economic interest group or, where applicable, the unlimited liability partners for general partnerships and limited partnerships; a statement by which the debtor in Romania expresses their intention to enter into the simplified procedure in Romania or judicial reorganization in Romania, according to a plan, through business restructuring in Romania or liquidation in Romania, either in whole or in part, to settle its debts; a brief description of the means considered for reorganization in Romania; a sworn statement, notarized or certified by a commercial lawyer in Romania, or a certificate from the agricultural registry or, where applicable, the trade register or other registries in the territorial jurisdiction where the company is registered, stating whether the company has been subject to judicial reorganization in Romania in the past five years prior to the submission of the request; a sworn statement, notarized or certified by a litigation lawyer in Romania, confirming that the administrator, directors, and/or shareholders who control the debtor in Romania have not been convicted of certain offenses stipulated by law; a certificate of admission to trading on a regulated market for securities or other financial instruments issued; a statement indicating whether the debtor in Romania is part of a group of companies, specifying them; proof of the unique registration code; and proof of notification of the competent tax authority.
All these documents must be submitted along with the insolvency petition in Romania or, at the latest, by the deadline for filing set by the judicial administrator in Romania. The court fee of 200 ron must also be attached to the application. During the insolvency process, consulting an insolvency solicitor in Romania and a business solicitor in Romania is essential to ensure legal compliance and explore the best options for debt restructuring in Romania or liquidation.
The Romanian Law Firm Pavel Mărgărit and Associates recommends seeking the services of an insolvency lawyer in Romania or a commerce lawyer in Romania to properly draft all the necessary documents for insolvency proceedings in Romania, thus maximizing the chances of judicial reorganization in Romania or debt recovery in Romania.
Commercial litigation attorney in Romania. Deadline for filing in Romania – insolvency proceedings in Romania
The insolvency procedures in Romania for a company with debts, registration in the creditors’ list, or the bankruptcy of a company in Romania are regulated by clear deadlines to prevent abuse and procedural delays. Thus, the debtor in Romania is required to file an insolvency petition in Romania within a maximum of 30 days from the occurrence of the insolvency in Romania. The deadline for resolving an insolvency petition in Romania submitted by the debtor in Romania is 10 days, and the procedure is conducted in the council chamber without summoning the parties. Creditors in Romania can request the opening of insolvency proceedings in Romania if their claims in Romania exceed 50,000 ron and the debt has been overdue for more than 60 days. Additionally, after an insolvency petition in Romania is filed, the creditors in Romania notified under the law are required to submit a statement of claim in Romania (request for admission of the claim to the creditors’ list) within the deadline established by the court decision opening the insolvency proceedings in Romania. However, this deadline cannot exceed 45 days from the publication of the court decision in the Insolvency Proceedings Bulletin.
The insolvency procedure in Romania establishes a forfeiture deadline for performing certain actions within the insolvency proceedings in Romania. Failure to meet a forfeiture deadline results in the loss of the right to perform that action, such as registering claims in Romania, appealing claims, or submitting a statement of claim in Romania, among others. Therefore, both the creditors in Romania and the debtors in Romania must carefully observe each forfeiture deadline to protect their interests.
The procedures involving a company insolvency in Romania, company bankruptcy in Romania, or registration in the creditors’ list for debt recovery in Romania are complex and involve multiple legal aspects. For this reason, the Romanian Law Firm Pavel Mărgărit and Associates recommends seeking the services of a commercial lawyer in Romania or a litigation lawyer in Romania to avoid procedural mistakes and safeguard the interests of the company or its creditors in Romania. Furthermore, a specialized insolvency lawyer in Romania or litigation lawyer in Romania can assist with drafting and filing a statement of claim in Romania (request for admission of the claim to the creditors’ list), contesting other creditors in Romania’ claims, and representing your interests before the courts.
The insolvency process in Romania provides businesses with legal mechanisms to either restructure their debts or proceed with bankruptcy if they are no longer financially viable. One of the primary options for struggling companies is corporate debt restructuring in Romania, which allows businesses to renegotiate their financial obligations with creditors to avoid liquidation.
For companies that cannot recover, consulting an insolvency solicitor in Romania is essential. A legal expert can guide businesses through the insolvency process, ensuring compliance with all legal requirements. In cases where debt restructuring in Romania is not feasible, companies may have to proceed with filing for business bankruptcy in Romania. This formal procedure requires submitting the necessary documentation to the relevant authorities and following the steps outlined by Romanian insolvency law.
It is important for businesses to be aware of the deadline for filing in Romania, as failure to meet this deadline can result in legal penalties or additional liabilities for company directors. Throughout the insolvency process, disputes between creditors and debtors may arise, requiring the expertise of a commercial litigation attorney in Romania to handle legal proceedings and protect the interests of the involved parties.
In recent years, there has been a rise in small business bankruptcies in Romania, highlighting the need for legal and financial planning to navigate economic challenges. Engaging a business solicitor in Romania can help companies explore all available options, from debt restructuring in Romania to liquidation, ensuring that they comply with the applicable laws and procedures.
Commercial lawyer in Romania. Continuing the business after the opening of insolvency proceedings in Romania
The insolvency petition in Romania for a company must be submitted to the tribunal in the jurisdiction where the debtor in Romania has its registered office. Once a company insolvency in Romania request is filed, the debtor in Romania may also request the provisional suspension of any enforcement proceedings. After the petition is submitted by the debtor in Romania, any subsequent insolvency petition in Romania filed by a creditor in Romania will be considered a statement of claim in Romania, if the request of the debtor in Romania is admitted. A statement of claim in Romania is the means through which a person acquires the status of creditor in Romania within the insolvency proceedings in Romania. This claim is then registered in the preliminary table of claims in Romania against the debtor’s assets and must be filed even if it is not established by an enforceable title.
Throughout the insolvency proceedings in Romania, the company’s entire activity is supervised by a person appointed by the syndic judge, known as the judicial administrator in Romania.
At the beginning of the insolvency procedure in Romania, the syndic judge of the tribunal where the insolvency petition in Romania was filed will appoint either a judicial administrator in Romania or a provisional liquidator in Romania (if the simplified procedure in Romania for bankruptcy of a company in Romania is chosen) from among the insolvency practitioners listed in the National Union of Insolvency Practitioners in Romania. This appointment will be confirmed or replaced at the first meeting of the creditors in Romania.
The judicial administrator in Romania notifies the creditors in Romania so that they can submit a statement of claim in Romania for registration in the creditors’ list. The creditors in Romania who are notified of the opening of the insolvency proceedings in Romania are required to file a statement of claim in Romania within the deadline set by the court decision initiating the insolvency procedure in Romania for a company with debts.
Another duty of the judicial administrator in Romania is to draft the preliminary table of claims in Romania after each statement of claim in Romania is submitted, verified, and admitted. The preliminary table of claims in Romania includes the amount claimed by the creditor in Romania, the amount accepted by the judicial administrator in Romania, information regarding any preferential rights attached to the claim, and the ranking of the preferential cause. The judicial administrator in Romania notifies the creditors in Romania and the debtor in Romania of the preliminary table of claims in Romania.
Legal Strategies for Creditors and Debtors in the Insolvency Procedure in Romania
Navigating insolvency proceedings in Romania requires a strategic approach that complies with current legislation, and collaborating with an insolvency lawyer in Romania is essential for assessing the financial situation, analyzing the company’s assets and liabilities to determine whether insolvency in Romania is inevitable or if there are alternatives to avoid it.
Complying with the deadlines set by the court and the judicial administrator in Romania, as well as contesting unfavorable decisions, are also key aspects to consider for the efficient management of insolvency proceedings in Romania.
To prevent company insolvency in Romania, insolvency procedures in Romania under Law 85/2006, followed by new regulations, have introduced two amicable debt renegotiation procedures: ad-hoc mandate and agreement with creditors.
The ad-hoc mandate is a confidential insolvency procedure in Romania aimed at preventing company bankruptcy in Romania, which involves appointing an ad-hoc representative by the court to negotiate with the creditor in Romania to reach an agreement with the debtor in Romania facing financial difficulties. The ad-hoc mandate may be requested by a debtor in Romania experiencing financial hardship to resolve issues through a simplified procedure in Romania. This process can last a maximum of 90 days from the appointment of the ad-hoc representative by the court president.
The agreement with creditors is an insolvency procedure in Romania that facilitates an arrangement between the creditor in Romania and the debtor in Romania, providing an amicable understanding to implement a business restructuring in Romania. The judicial administrator in Romania is appointed by the court, and this designated person is responsible for overseeing the process and assisting the debtor in Romania in negotiations with creditors in Romania.
Legal assistance from a commercial lawyer in Romania ensures the correct and timely submission of an insolvency petition in Romania, safeguards the rights of the debtor in Romania in relation to the judicial administrator in Romania and creditors in Romania, and can help avoid the bankruptcy of a company in Romania. Moreover, the absence of proper legal guidance may result in financial losses, legal sanctions, and procedural deadlocks.
The Romanian Law Firm Pavel Mărgărit & Associates provides high-standard legal services in various practice areas, including insolvency procedures in Romania. Our team demonstrates an in-depth understanding of insolvency advice in Romania, offering clear and effective legal solutions to all clients seeking the services of a commercial lawyer in Romania.