ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
Zamfirescu Racoți Vasile & Partners Attorneys at Law
12 Plantelor Street 023974 District 2 Bucharest Romania
Tel: +40 21 311 05 17 Fax: +40 21 311 05 19 Email: office@zrvp.ro Web: www.zrvp.ro
1. Overview of Legal and Regulatory System for Insolvency/Restructuring/ Liquidation 1.1 Legal Framework Currently, the insolvency procedure in Romania is reg - ulated by Law No 85/2014, also known as the Insol - vency Code, which is similar in content to the former Law No 85/2006 (amended substantially in 2014, 2018 and 2022). This law provides classic insolvency, reor - ganisation and liquidation procedures, as well as two restructuring procedures (which aim to help redress the solvable debtor’s activity) – namely, the procedure of the restructuring agreement ( acord de restructurare ) and the procedure of arrangement with creditors ( con- cordat preventiv ). The latter has kept its name since the 2022 amendments, but it has been modified in substance. The provisions of the special law can be supplemented with the provisions of the Civil Proce - dure Code and of the Civil Code, to the extent that they do not contravene the latter. For certain entities, like credit institutions or insurance companies, special procedures apply. These are gov - erned by Law No 312/2015 (regulating the recovery and resolution of credit institutions and investment firms) and Law No 237/2015 as amended by Law No 17/2024 (governing insurance company financial recovery and insolvency, among other things). These laws provide tailored frameworks for addressing finan - cial distress in these sectors, ensuring stability and protecting depositors. Law No 17/2024, for example, regulates a special financial recovery procedure for insurance companies and defines the notion of the
“insolvency of the insurance/reinsurance company”. Law No 503/2004 on financial redress, bankruptcy, dissolution and voluntary liquidation in the activity of insurance was repealed as of 19 January 2024. 1.2 Types of Insolvency General Overview The law provides for two voluntary procedures to redress a debtor’s activity outside the courtroom that transpose Directive (EU) 2019/1023 on restructuring frameworks: the procedure of the restructuring agree - ment, and the procedure of arrangement with credi - tors. These procedures are applicable in the case of a debtor in difficulty, including financial difficulty. In the case of a debtor in payment default, the law also provides a judicial procedure. Voluntary Restructuring Procedures Restructuring agreement The procedure of the restructuring agreement is a confidential, partially collective and minimal judicial procedure by which a restructuring administrator assists the debtor or, at the debtor’s request, negoti - ates with the creditors in order to sort out the state of difficulty in which the company finds itself. Among other advantages and novelties of the restructuring agreement is the fact that the debtor retains its right to manage the business (debtor in possession). The intrusion of the syndic judge is limited to verifying the legality of the restructuring agreement, including the fair treatment of creditors, and that the agreement was approved by the necessary majority (creditors holding at least 30% of the affected receivables). The possibil - ity of cross-class cram-down is provided.
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