ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
5.3 The End of the Liquidation Procedure(s) The bankruptcy procedure will close after all the amounts collected have been distributed to the credi - tors, the unclaimed funds have been deposited with the bank, and the syndic judge has approved the final report. At any stage of the procedure, if there are no assets, or these are insufficient to cover the adminis - trative expenses and no creditor is willing to advance funds, the syndic judge can close the procedure. By closing the procedure, the syndic judge deregisters the debtor from the Trade Register and relieves the liquidator of any duties and responsibilities. If during the liquidation procedure, the amounts col - lected and distributed cover all receivables, the syn - dic judge can close the procedure even before all the assets have been capitalised, in which case, the remaining assets will be divided among the sharehold - ers. Also, in the situation described above (all receiva - bles covered), if other assets are identified after the procedure has been closed, they will automatically become the property of the shareholders. On the other hand, if the assets were not sufficient to cover all the receivables and other assets are discovered, case law allows that the procedure can be reopened. When no receivable claims have been filed against the debtor’s estate after the opening of the bankruptcy procedure, the syndic judge will close the procedure without deregistering the debtor from the Trade Reg - ister. 5.4 The Position of Shareholders and Creditors in Liquidation Priority Right In general, precautionary measures established on the debtor’s assets do not offer the creditor a priority right of collection in insolvency. Some measures may be considered for determining such preferred (secured) character of the receivable claimed, but only if cer - tain conditions are met, without preventing the pos - sibility of sale of the assets in the liquidation proce - dure. In principle, the assets sold by the insolvency practitioner in the insolvency procedure are acquired free of encumbrances, except preventative measures ordered in a criminal case with a view to special con - fiscation and/or extended confiscation.
Set-Off Right and Retention of Title The right of the creditor to set-off their claim, if the conditions provided by law are met, can also be exercised for the mutual claims born after the date of opening of the insolvency procedure, meaning this is also possible in liquidation. If the seller has retained the title until the debtor pays the price in full, the law provides the sale will be deemed performed by the seller. The assets for which the title was retained will become the property of the debtor, and the creditor will benefit (if the public record registration has been carried out) from a preferential cause (legal mortgage). Right to Delay or Block Liquidation As the creditors have the decision of opportunity, they can delay the liquidation process by challenging the measures of the liquidator, by refusing to participate in creditors’ meetings, etc, but they cannot block it. In most cases, the delay will not benefit them, as it is likely to reduce the degree of recovery. The law also provides remedies for the liquidator in such situations, for example, the possibility to request that the sale be made by public auction in accordance with the civil procedure code (and not the Insolvency Law), if the assets have not been sold within a reasonable interval. Third-Party/Non-Debtor Releases In bankruptcy proceedings, there is no legal provi - sion allowing for the release of liability of the debtor’s shareholders, the debtor itself, or members of an eco - nomic interest group. By contrast, the Insolvency Law permits the judicial liquidator to conclude settlements with guarantors whereby they may be released from their obligations, subject to confirmation by the syndic judge. Actions and Enforcement Measures As a general rule, from the date of the opening of the insolvency procedure (general or simplified), all judi - cial or extrajudicial actions or enforcement measures for the realisation of receivables against the debtor’s assets are suspended. When the decision to open the procedure becomes final, all judicial/extrajudicial actions and all enforcements cease. In order to pursue any receivable right against the debtor, whether guar - anteed or unguaranteed, the creditor is obliged to reg -
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