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.

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