Question 1

What is the insolvency procedure in Romania?

Accepted Answer

Insolvency is regulated by Law 85/2014 and applies to debtors unable to pay due debts. The procedure includes: observation (analysis), judicial reorganization (rescue plan for max. 3 years) or bankruptcy (asset liquidation). Petitions can be filed by the debtor (mandatory within 30 days of insolvency) or by creditors with certain, liquid, and due claims of minimum RON 50,000 (~€10,000).

Question 2

What is the difference between insolvency and bankruptcy?

Accepted Answer

Insolvency is the factual state — inability to pay debts. Bankruptcy is a judicial liquidation procedure. An insolvent company can avoid bankruptcy through judicial reorganization, which allows continued operations under an insolvency administrator's supervision, with a creditor-approved plan confirmed by the syndic judge.

Question 3

What obligations do directors have when a company becomes insolvent?

Accepted Answer

Directors must file for insolvency within 30 days of the company becoming insolvent. Failure triggers personal liability under Art. 169 of Law 85/2014. Directors can be required to personally cover the company's liabilities if they: continued operations for personal benefit, used company assets for personal gain, concealed accounting records, or contributed to insolvency through mismanagement.

Question 4

How can I recover money from an insolvent company?

Accepted Answer

As a creditor: 1) File your claim within the deadline set by the syndic judge (typically 45-60 days from procedure opening), 2) Claims must be certain, liquid, and due, 3) Verify inscription in the preliminary creditor table and challenge if necessary, 4) Attend creditor assemblies to vote on the reorganization plan. Priority order: secured claims, salary claims, tax claims, unsecured claims.

Question 5

What is a preventive concordat?

Accepted Answer

The preventive concordat (Art. 5-34 of Law 85/2014) is a pre-insolvency procedure where the debtor negotiates a restructuring plan with creditors without opening formal insolvency proceedings. Advantages: the debtor retains business control, no insolvency administrator is appointed, the procedure is confidential. Approval requires creditors representing minimum 75% of claims value.

Question 6

How long does an insolvency procedure take in Romania?

Accepted Answer

Duration varies significantly: Simplified procedure (direct bankruptcy): 6-12 months. General procedure with reorganization: 2-4 years (reorganization plan max. 3 years). Bankruptcy after failed reorganization: additional 1-2 years. The entire process can take 3-5 years in complex cases. Specialized legal assistance can significantly accelerate the process.

Question 7

Can fraudulent acts of the debtor be annulled?

Accepted Answer

Yes, the insolvency administrator or creditors can request annulment of fraudulent acts concluded by the debtor during the suspect period (2 years before procedure opening). Acts subject to annulment: asset transfers below market value, preferential payments to certain creditors, guarantees for pre-existing debts, simulated acts. Avoidance actions are heard urgently by the syndic judge.

Question 8

What role does the insolvency administrator play?

Accepted Answer

The insolvency administrator (appointed by the syndic judge) has essential roles: supervising debtor activities, verifying claims and preparing the creditor table, reporting on insolvency causes, proposing reorganization or entering bankruptcy, and managing liquidation operations. The administrator's fee is paid from the debtor's estate.

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