ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
Arrangement with creditors An arrangement with creditors is an agreement con - cluded between the company in difficulty and the creditors holding at least 30% of the affected receiv - ables (other specific conditions are applicable), by which a restructuring plan for redress that can modify the creditors’ receivables, is proposed. The procedure is co-ordinated by an administrator (insolvency practi - tioner), the contribution of the syndic judge being lim - ited to the approval of the redress plan and settling any challenges. The debtor benefits from a temporary stay of individual enforcement actions for a period ranging from three to a maximum of 12 months. The possi - bility of cross-class cram-down is provided. Debtors that had an arrangement with creditors when the 2022 amendments to the insolvency law entered into force could request an extension of the arrangement, but for no more than 60 months from the date of the syndic’s approval. Creditors who voted against the extension, or those who were not part of the arrangement, could file for the opening of insolvency proceedings against the debtor or seek to recover their claims in any other way provided for by law. Involuntary – Formal Insolvency Proceedings The insolvency procedure may consist either of a sim - plified procedure, in which case the company enters into bankruptcy directly; or a general procedure, in which case the company may enter, after an observa - tion period, into the reorganisation period (if there is a chance of redress and the creditors agree with the proposed measures) and, possibly (in the case of the failure of a reorganisation plan or when such a plan is not proposed or not accepted), into bankruptcy. 1.3 Statutory Officers Types, Selection/Appointment of Officers Statutory officers play a crucial role in various legal and statutory regimes, especially in insolvency and restructuring procedures. Their responsibilities, pow - ers and interactions with the debtor and its directors depend on the specific type of statutory officer and the legal framework in place. All the officers appointed according to Law No 85/2014, namely, the administrator in an arrangement with the creditors, the ad hoc proxy or the insolvency administrator/judicial liquidator, must be insolvency
practitioners. The insolvency administrator/judicial liquidator is appointed by the debtor or the creditors and, subsequently, confirmed by the syndic judge. If there are nomination proposals from both the credi - tors and the debtor, the creditors’ nomination will prevail. The practitioner is appointed from those who have submitted an offer to the case file, depending on the complexity of the procedure, and the expertise and capacity required to manage the procedure. In a procedure of insolvency of a natural person, the liquidators may be randomly appointed from insolven - cy practitioners, court enforcement officers, attorneys at law and/or notaries. Statutory Roles, Rights and Responsibilities of Officers The insolvency administrator has powers and duties of supervision over the debtor’s current activity, and also monitoring the performance of the reorganisa - tion plan (if approved). Contracts, operations and pay - ments that exceed the business-as-usual rule will be authorised by the judicial administrator after they are approved by the creditors’ committee. If the admin - istration rights have been suspended by the court, the management of the company is conducted by the judicial administrator, who assumes all the pow - ers and duties. Opening the bankruptcy automatically removes the administration right of the debtor and the judicial liquidator takes over the management of the debtor’s business and assets. The law regulates several hypotheses in which an insolvency practitioner may not fulfil the role of insol - vency administrator/judicial liquidator. In particular, these refer to situations in which the practitioner has had relations with the debtor during a period of two years prior to the opening of the insolvency proce - dure. Also, an insolvency practitioner who is a former judge may not be appointed as administrator/liquida - tor in the territorial jurisdiction of the court of law in which they performed their activity during the past three years. Creditors, statutory administrators or managers may not be appointed as insolvency administrators/liqui - dators of a company.
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