This procedure has changed starting with June
2014. The Law 85/2014 has completely abolished the former Law of Insolvency
no. 85/2006. This new piece of legislation tries to unify the concepts and
institutions already existing.
The purpose of this law is to institute a collective procedure that shall be
used to cover the liability of the debtor and giving, when possible, a
change to recover the activity.
This procedure applies to debtors which are in financial difficulty, the
professionals defined in article 3 of the New Civil Code, apart from the
liberal professions .
The bodies which apply this procedure are the courts, the liquidator, the
bankruptcy judge and the judicial administrator. All the costs which result
from this procedure shall be paid by the debtor.
There are two possibilities for the debtor: to either try and reorganize its
business in order to save it, in this case a judicial administrator being
appointed, or to apply for the simplified procedure of bankruptcy, a
liquidator being appointed. Also, if the reorganization is not effective
than the bankruptcy procedure begins and a liquidator is appointed by the
The procedure shall begin with the filling of a request to enter the
insolvency procedure by the debtor, the creditor or any other persons or
institutions mentioned by the law.
This request shall be judged in the council chamber, with urgency (within 10
days). It will have attached the following documents:
a) The balance sheet certified by the administrator and auditor, and balance
for the month preceding the date of recording the request of opening the
b) A complete list of all debtor’s assets including all the accounts and
banks used by the debtor to run his funds; for the encumbered assets all
dates will be mentioned as contained in the publicity registers;
c) A list of the creditors’ names and addresses;
d) A list of payments and patrimonial transfers made by debtor in the 6
months before the filing of the first application;
e) A list of current activities he intend to carry out in the observation
f) Profit and losses for the year prior to submission of the request;
g) A list of members of economic interest group or, where appropriate,
partners with unlimited liability (for certain legal entities);
h) A statement by the borrower indicates his intention to enter the
simplified procedure or reorganization, according to a plan, by
restructuring activity or liquidation, in whole or in part, of goods, in
order to extinguish its debt;
i) A brief description of the modalities for the reorganization of activity;
j) An affidavit, certified by a notary or certified by a lawyer, or a
certificate from the register of agricultural companies , or the Trade
Register Office in whose territorial jurisdiction is the place of business /
office , showing that if it has been subject to the procedure set out by
this Act within 5 years prior the formulation of the application;
k) An affidavit authenticated by a notary or certified by a lawyer, showing
that the entity was not sentenced for forgery or other offences, that its
managers , directors and / or associations have not been finally convicted
for fraudulent bankruptcy, fraudulent management , breach of trust, fraud,
embezzlement, perjury, forgery offenses or other offenses in last 5 years
before opening the procedure;
l) A certificate of admission to trading on a regulated market of securities
or other financial instruments issued;
m) Proof of the unique code of registration;
n) Proof that a fiscal authority has been notified.
Cannot be subject of judicial reorganization debtors, legal entities, which
in the last 5 years preceding the decision to initiate the procedure, had
undergone judicial reorganization proceedings.
Any creditor is entitled to request the opening of procedure mentioned by
this Law; against a presumed insolvency the debtor may bring a first
application, which will specify:
a) amount and basis of claim;
b) existence of a security interest, constituted by the debtor or
established by law;
c) existence of precautionary measures on the debtor's goods;
d) declaration of intent to participate in the reorganization of the debtor,
in which case he should specify, at least in principle, how he intends to
participate in the reorganization.
At the request of the debtor, the bankruptcy judge may obligate the
creditors who filed the application to consign, in 5 days, to a bank, a bail
which represents at most 10% of the claims, but not more than 40.000 RON.
The bail will be returned to the creditors, if their application will be
accepted. If the request will be rejected , the bail will be used to cover
the damages suffered by debtors. If the bail is not consigned in time, the
first application will be rejected.
If the bankruptcy judge establishes that the debtor is not in insolvency, he
rejects the creditors’ request, which will be considered without any effect
since its registration.
The most important effect of the opening of this procedure is that from the
date of the procedure’s opening, all the judicial actions, extrajudicial
actions or measures of forced execution for the claims’ recovery on the
debtor or his goods, will be suspended.
Interest, increase or any kind of penalty or expense, generically called
accessories, will not be added to claims arisen before the procedure’s
The debtor has the obligation to offer the judicial administrator/
liquidator all the documents necessary for both the reorganization and
bankruptcy phase of the procedure.
When the bankruptcy procedure is opened the debtor loses its administrative
rights and cannot undergo any operations other than those necessary for
The bankruptcy judge will decide, through a sentence, the bankruptcy in the
a) the debtor declared his intention to enter the simplified procedure;
b) the debtor did not declare his reorganization intention, or at the
creditor’s opening the procedure request, he contested that he would be
insolvent, or the contestation was rejected by the bankruptcy judge;
c) none of the others entitled persons did not suggest a reorganization plan
, or none of suggested plans was accepted and confirmed;
B) The debtor declared his reorganization intention, but he did not suggest
a reorganization plan or the suggested plan was not accepted or confirmed;
C) The payment obligations and the other assumed tasks are not fulfilled as
they were stipulated in the confirmed plan or the debtor’s activity during
his reorganization brings losses to his fortune.
D) the judicial administrator’ s report suggesting , where appropriate, the
debtor’s bankruptcy entrance , was approved.
If all the debtor’s debts are covered, the procedure is considered to be
closed. Also, in any stage of the procedure if a lack of assets was found,
or the assets were insufficient to cover the whole debt, and neither of the
creditors wants to cover the debtor’s debts, then the procedure is
considered to be closed.