ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
both in terms of voting on the plan and the order of compensation. If the debtor intends to propose a reor - ganisation plan, they must obtain the consent of the general assembly of shareholders/associates. Since the shareholders cannot intervene in the develop - ment of the reorganisation plan, they have no means to block or disrupt the procedure. Secured Creditor Liens and Security Arrangements No changes to the liens and security arrangements of a secured creditor can be made unless the creditor approves them or unless the contractual conditions Claims may be traded without any approval from other parties except those involved in the assignment of the receivable. The transfer will be effective and rec - ognised once it is notified to the debtor and to the judicial administrator. However, for trading the budgetary receivables, cer - tain conditions and requirements are applicable. Existing Equity Owners Existing equity owners cannot receive or retain any ownership or other property on account of their own - ership interests, unless all the other debts are paid. for releasing such securities are met. Trading of Claims Against a Company 5. Statutory Insolvency and Liquidation Procedures 5.1 The Different Types of Liquidation Procedure In accordance with the Romanian Insolvency Law a company can enter a bankruptcy procedure directly through a simplified procedure, or by going through the general procedure and not proposing a reorgani - sation plan, or by failing to obtain the approval of the reorganisation plan by the creditors, or by failing to comply with the provisions of the approved plan. To initiate the procedure, the debtor must be in a state of insolvency characterised by a lack of funds to pay certain, liquid and due debts higher than RON50,000 for more than 60 days from the due date. In the case of a professional who applies for a simplified bankruptcy
procedure, one of the following conditions must also be met: • absence of any assets; or • the accounting documents cannot be found; or • the company no longer has management bodies, or they no longer function; or • the registered office no longer exists or no longer corresponds with the address mentioned in the public registries; or • the debtor has previously been voluntarily, judicially or ex lege dissolved; or • the debtor expressly manifests its intention to go directly to bankruptcy. The procedure is opened by the syndic judge based on a request submitted to the court by the debtor, by one or more creditors, or by the entities/institutions expressly provided by law (eg, a financial supervision authority in the case of insurance companies). The law obliges the debtor to file the insolvency request within 30 days from the occurrence of insolvency. If delayed, the company management (statutory bodies) may face patrimonial liability actions and also criminal charges. If a general procedure has been opened, the transition to bankruptcy is also ordered by the syndic judge ex officio, if they find the legal conditions have been met, or at the request of the judicial administra - tor. The bankruptcy procedure, both simplified and gen - eral, applies primarily to professionals and only under certain conditions to liberal professions and only con - cerning their enterprise. The simplified procedure in accordance with Law No 85/2014 also applies to any person with professional activity that has not obtained the authorisation required by law for the operation of an enterprise and is not duly registered. While the liq - uidation of assets is a procedure also found in the insolvency of a natural person (governed by Law No 151/2015), which leads to the release of residual debts, it distinguishes itself from the insolvency of professionals, as it does not lead to the disappear - ance of the legal subject. 5.2 Course of the Liquidation Procedure The two main effects of entering bankruptcy are the dissolution of the debtor and the removal of the
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