ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation The law provides for a reorganisation procedure as part of the general insolvency procedure. Thus, before ordering the debtor’s entry into the judicial reorganisa - tion procedure, the opening of insolvency proceed - ings is required, which implies the fulfilment of the conditions provided by law in this regard. Romanian law sets forth that an insolvent debtor is obliged to file a claim with the tribunal requesting that it be subject to the insolvency procedure within a maximum of 30 days from the occurrence of insolvency. This is defined as the point at which insufficient funds are available for the payment of certain, liquid and payable debts that are more than 60 days overdue. The minimum amount of these debts should be RON50,000. Any creditor holding a receivable higher than RON50,000 against a company, that has not been paid in a term of at least 60 days from its maturity, may also request the opening of an insolvency procedure against the company. When a debtor is in payment default, it is mandatory that a request to open the insolvency procedure is submitted to the court. The insolvency procedure may consist either of a simplified procedure, in which case, the company enters bankruptcy directly; or a general procedure, in which case, the company may enter into a reorganisation period (after the observation period), if there is any chance of redress and the creditors agree with the proposed measure. To benefit from the right to reorganise, the debtor will have to declare this intention, either in the claim to open the procedure or by a separate declaration (if the procedure was opened at the request of a creditor). Conditions and Process for a Financial Restructuring/Reorganisation For an insolvent company to reorganise based on a reorganisation plan, it has to submit the plan within the legal term provided by the law, obtain the credi - tors’ votes (acceptance) according to the special procedure, and secure confirmation from the syndic judge. The reorganisation plan may be proposed by
The preventative proceedings provide that the credi - tors should not receive less than they would receive in the next best alternative scenario, which may even mean bankruptcy, based on an evaluation report drawn up by an authorised valuer no more than six months before the date of opening of the procedure. Relations Between the Parties Debtors must convince the affected creditors (those whose claims or interests are directly affected by a restructuring plan) about the viability of the restruc - turing agreement/plan and that this is preferable to entering a statutory insolvency procedure. In so far as this concerns the possibility to impose the plan on dissenting creditors, the cross-class clam-down is implemented for both the vote on the restructuring agreement and the restructuring plan. Basically, the judge can confirm the agreement/approve the plan if not approved by the creditors of each category of receivables with an absolute majority (over 50%), if certain cumulative conditions are fulfilled. In general, restructuring market participants and professionals place greater trust in the possibility of recovering receivables outside of insolvency proce - dures, that is, within an informal procedure. Nonethe - less, historically speaking, the consensual procedures are very rarely used in practice, individual negotiations being preferred. The restructuring agreement and the arrangement with creditors’ procedures were regu - lated in 2022, and have since become more popular, although the number of preventative procedures is still low (175 new procedures in 2024, compared to 7,274 insolvency procedures). 3.2 Legal Status The out-of-court restructuring procedures are flexible, negotiation-based and partially collective procedures. The restructuring agreement/plan can be invoked against the dissenting creditor only if certain condi - tions are met. Creditors who do not participate (non- affected) retain their rights and can pursue their claims independently, which makes the procedure less bind - ing and enforceable compared to formal restructuring procedures under insolvency law.
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