Initiation Of Insolvency Proceedings And Its Effects In Romanian Law

• Author: Cristina Cojocaru
• Position: Department of Law, Bucharest University of Economic Studies, Romania
• Pages: 224-229

INITIATION OF INSOLVENCY PROCEEDINGS AND ITS EFFECTS

IN ROMANIAN LAW

Lecturer Cristina COJOCARU1

Abstract

Under Romanian law, insolvency shall be initiated at the request of the persons entitled, usually the debtor or

the creditor. After checking the fulfilment of the legal conditions, the syndic judge will order the opening of insolvency

proceedings as well as the measures to be taken to know precisely the financial situation of the debtor, the causes that

led to the situation of insolvency and the way forward, i.e. the general or simplified procedure. The judicial administrator

draws up a report based on which the syndic judge shall decide either the continuation of the general procedure in order

to observe the chances of recovery of the debtor on the basis of a reorganization plan or the transition to the simplified

procedure: the bankruptcy procedure. In the first case – that of the general proced ure – a reorganization plan will be

applied, leading to the improvement of the d ebtor's activity and the payment of the debts to its creditors; in the second

case, there are some steps that will lead to the liquidation of the debtor's estate to cover the claims of the creditors.

Without claiming to analyses the topic extensively, the article aims to underline the most important aspects about entering

the insolvency procedure.

Keywords: Romanian business law, insolvency, insolvency proceedings, initiatio n of insolvency.

JEL Classification: K22

1. Introduction

Under Romanian Law, the legal provisions in this matter are showing a picture of the

proceedings updated in accordance with the European regulations. After the year 1989, from a view

in favour of the debtor to a view probably more the creditors-oriented, the legal framework has

constantly change in Romania2.

In the current Law no. 85/2014 (“the Law”), the insolvency proceedings are triggered with an

application filed with the competent court – the tribunal – by the debtor, the creditors or other persons

or institutions provided by law3.

Immediately upon receipt of the request, the syndic judge will be appointed to resolve such a

request.

The syndic judge will verify the application as regards the fulfilment of the conditions

required by the law for the initiation of insolvency proceedings and will rule by an order or a decision

and, according to the person who filed the application, the creditor or the debtor, the resolution is

different.

2. The application filed by debtor

If the syndic judge finds that the debtor's request meets the requirements of the law, he shall

issue an order to open the general procedure.

The syndic judge may also order the opening of the simplified procedure if several conditions

are fulfilled: either the debtor has expressed his intention to enter into a simplified procedure, or he

fails to submit the documents provided by the law within 10 days or he falls into certain categories

provided by law.

If the opening of the general procedure is ordered, the syndic judge will appoint a judicial

administrator and, if a simplified procedure starts, the judge will appoint a liquidator, who must carry

1 Cristina Cojocaru – Department of Law, Bucharest University of Economic Studies, Romania, cristina.cojocaru@cig.ase.ro.

2 For a comparative perspective, view Matthew Braham, Frank Steffen, Voting rules in insolvency law: a simple-game theoretic

approach, „International Review of Law and Economics”, Volume 22, Issue 4, December 2002.

3 See Carpenaru D.St., Hotca M.-A., Nemes V., Codul insolventei comentat, Universul Juridic Publishing House, Bucharest, 2017, p.

20 et seq.; Tandareanu N., Codul insolventei comentat. Vol.1: Art. 1 -182, Universul Juridic Publishing House, Bucharest, 2017, p. 32

et seq.