Ways to prevent insolvency in Romania
Insolvency in Romania is that state of a company in Romania when it is financially unable to pay its certain, liquid and exigible debts to creditors, regardless of whether they originate from commercial, labor or any other relations. By adopting the Romanian Law no. 85/2014 on insolvency prevention and insolvency procedures, the legislator aimed to establish financial recovery measures, so that the company in Romania can continue its economic activity in Romania. Pavel, Margarit and Associates Romanian Law Firm recommends contacting a lawyer specialized in insolvency, bankruptcy and insolvency prevention procedures in Romania that can provide you with highest quality legal assistance and representation in case a company in Romania is in financial difficulty, through implementing insolvency prevention strategies.
Insolvency vs bankruptcy
Insolvency in Romania and bankruptcy in Romania are two distinct stages in the existance of a company in Romania. As we mentioned before, according to the Romanian Law no. 85/2014 on insolvency prevention and insolvency procedures, insolvency in Romania is a state of the patrimony, characterized by the fact that the company does not have the necessary funds to cover debts to creditors. The opening of insolvency proceedings in Romania is followed by an observation period, followed by the judicial reorganisation and/or bankruptcy proceedings in Romania. Insolvency proceedings in Romania offer the possibility of financial recovery.
Bankruptcy in Romania is the last stage of the insolvency proceedings in Romania, being characterized by the liquidation of the company’s assets to cover the debts.
Procedure of the restructuring agreement in Romania
The company in difficulty may propose a restructuring agreement in Romania, which is drawn up by the restructuring administrator or the debtor, with the assistance of the restructuring administrator.
The proposed restructuring agreement in Romania is communicated to creditors whose claims are affected, the next step being conducting negotiations. The restructuring agreement in Romania shall be voted only by creditors whose claims are affected, creditors whose claims are not affected by it having no right to vote on it. Subsequent to the completion of the voting procedure and within a maximum period of 3 days from the end of the report of ascertaining the vote, the company in Romania must submit to the competent court an application for confirmation of the restructuring agreement in Romania, and will be judged in non-contentious procedure without summoning the parties, in the advising chamber and the syndic judge will pronounce a solution within maximum 10 days from the date of registration of the application.
If a restructuring agreement in Romania is confirmed by the court, the debtor’s activity will have to be restructured in accordance with its provisions.
A lawyer specialized in insolvency, bankruptcy and insolvency prevention procedures in Romania can provide you with legal assistance and representation in the field of commercial law, especially regarding the prevention of insolvency in Romania.
Arrangement with creditors in Romania
The approval of the arrangement with creditors procedure in Romania is in the competence of the syndic judge who will appoint an administrator contracted by the debtor. The administrator shall draw up or, where appropriate, assist the debtor in the preparation of the restructuring plan in Romania, whereby restructuring measures are proposed with a view to the economic recovery of the company in Romania.
If the restructuring plan in Romania is approved, the arrangement with creditors procedure in Romania is concluded and its provisions for the economic recovery of the company in Romania will be implemented.
Thus, a company in Romania may face economic difficulties, but the Romanian Law no. 85/2014 on insolvency prevention and insolvency proceedings also provided as ways to redress it, such as the restructuring agreement in Romania and the arrangement with creditors in Romania. Pavel, Margarit and Associates Romanian Law Firm is internationally recognized for its top-notch legal assistance, being represented by lawyers specialized in insolvency, bankruptcy and insolvency prevention procedures in Romania.