ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
assets may be sold pursuant to the provisions of the reorganisation plan. If the reorganisation plan is not approved by the credi - tors or confirmed by the judge, bankruptcy may be declared. Failure to Observe the Terms of Agreements In the event the debtor company fails to fulfil its obli - gations as per the terms of an agreed reorganisation plan, the bankruptcy procedure will be declared. The bankruptcy application for non-compliance with the reorganisation plan can be formulated by any of the creditors or by the judicial administrator. In the event of bankruptcy after confirmation of a reor - ganisation plan, the holders of receivables will partici - pate in the distributions with the receivables recorded in the final consolidated table. Regarding the guar - antees provided for the fulfilment of the obligations assumed by the reorganisation plan, these will remain valid in favour of the creditors for the payment of the amounts due according to the reorganisation plan. The creditors are not usually directly involved in the Among other advantages and novelties of the restruc - turing 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 its approval of the creditors holding at least 30% of the affected receiva - bles. In insolvency, if the right to manage is not lifted, the company can continue to operate its business as usual after the date of the opening of the procedure, under the supervision of the insolvency administrator. For operations that exceed the current activity, special approval will have to be obtained from the creditors’ committee. In cases where the court orders the sus - performance of a restructuring plan. 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation The Principle – Debtor in Possession
pension of the management right, the management of the company passes to the judicial administrator. After the procedure opening date, the sharehold - ers of the debtor are summoned to elect a special administrator. This will be the only person/entity able to manage the company, under the supervision of the
insolvency administrator. Obtaining New Financing
In the observation period and during the reorganisa - tion period, the debtor can obtain financing from new or existing creditors, through direct negotiation with the financer and following the approval of the loan conditions by its creditors.
4.5 The Position of Office Holders in Restructuring, Rehabilitation and Reorganisation
The ad hoc proxy is appointed to identify solutions for reaching an understanding with the creditors. The administrator, in an arrangement with the creditors, prepares the creditors’ table and, together with the debtor, puts together a plan which will make it pos - sible to reconstruct the debtor’s business. The insol - vency administrator drafts the creditors’ table, super - vises the insolvency procedure and drafts the monthly activity reports in which it presents the debtor’s activ - ity or, as the case may be, directly manages the debt - or when the debtor’s administration right has been removed. The insolvency administrator may propose a reorganisation plan, may unilaterally terminate the ongoing agreements, and/or may appoint specialists in the procedure. 4.6 The Position of Shareholders and Creditors in Restructuring, Rehabilitation and Reorganisation Position of Shareholders In insolvency, the shareholders are represented by the special administrator, whom they must appoint when the judicial administrator summons the shareholders’ general assembly. After the opening of the procedure and the appointment of the special administrator, the general assembly of shareholders/associates sus - pends its activity and will only meet if summoned by the judicial administrator. Shareholders/associates who are also creditors have a disadvantaged status
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