Insolvency is the state of a debtor's estate characterized by insufficient available funds to pay debts that are certain, liquid and due. The procedure is governed by Romanian Law 85/2014 on insolvency-prevention and insolvency proceedings.
Who can file a petition to open the procedure?
A petition to open insolvency proceedings can be filed by:
- The debtor — when overdue debts exceed 50,000 lei, within a maximum of 30 days from the onset of insolvency
- The creditors — holding claims that are certain, liquid and due of at least 50,000 lei, overdue for at least 60 days
- The tax authority (ANAF) — as a budgetary creditor
The stages of the insolvency procedure
1. The observation period
It lasts a maximum of 12 months from the opening of the procedure. During this period, the judicial administrator analyzes the debtor's situation, verifies the claims and draws up the table of creditors. The debtor may propose a reorganization plan.
2. Judicial reorganization
If the debtor is viable, a reorganization plan can be proposed, including operational restructuring, debt renegotiation and continued activity under supervision. The plan must be approved by the creditors and confirmed by the syndic judge. The maximum duration is 3 years.
3. Bankruptcy
If reorganization is not possible or fails, bankruptcy proceedings are opened. The debtor's assets are liquidated, and the proceeds are distributed to creditors according to the legal order of priority. The duration varies between 1 and 5 years.
The important deadlines
| Action | Deadline |
|---|---|
| Filing the proof of claim | 45 days from the opening |
| Publication of the preliminary table | 30 days from the expiry of the filing deadline |
| Challenges to the preliminary table | 7 days from publication |
| Proposing the reorganization plan | 30 days from the publication of the final table |
How much does the procedure cost?
The insolvency practitioner's fee is set by the syndic judge or negotiated with the creditors. It usually includes a fixed monthly fee and a percentage of the amounts recovered or of the asset realizations.
For personalized advice on your situation, contact us for an initial assessment.