Any Chance In Fighting Abusive Insolvency Requests?

Schoenherr has recently been involved in one of the most important insolvency cases in Romania. Besides being a high profile case it also benefited from extensive media cover age as well as political involvement.

In the case, the insolvency proceedings had not been used for the purposes provided by Law 85/2006 on insolvency proceedings (Law 85) but for other purposes. Schoenherr faced several questions. What is the actual scope of the insolvency proceeding? When is an insolvency request abusive? Who and how can one fight such requests?

What is the scope of the insolvency proceeding?

Article 2 of Law 85 provides that the scope of the insolvency law is to establish a collective procedure with a view to settle the debts of an insolvency company. Consequently, the procedure applies only to companies in a state of insolvency or if insolvency is imminent. The procedure has a clearly defined purpose: to settle the debts of the insolvent company.