ROMANIA Law and Practice Contributed by: Stan Tîrnoveanu, Alexandru Iorgulescu, Laura Retegan and Viorica Clima, Zamfirescu Racoți Vasile & Partners Attorneys At Law
lation (EU) No 1215/2012 is applicable, meaning that a judgment given in any other EU country is recog - nised in Romania without the need for any special procedure. 6.5 Co-Ordination in Cross-Border Cases All reciprocity agreements concluded between Roma - nia and other states also apply to insolvency proce - dures. Internal legislation includes regulations regard - ing cross-border insolvency. 6.6 Foreign Creditors There is no different treatment for foreign creditors in insolvency procedures, or prevention of insolvency procedures, that are opened within the territory of Romania. 7. Duties and Liability of Directors and Officers 7.1 Duties of Directors The duties/obligations of the directors of a company derive from the Romanian Companies’ Law (Law No 31/1990) on the articles of incorporation, and from the mandate granted by the company. Even before the state of difficulty is apparent, the law stipulates that administrators/directors must take into account at least three aspects: • the interests of creditors, title-holders and other interested persons; • the need to take reasonable and appropriate measures to avoid insolvency and to minimise the losses suffered by the aforementioned, to which the employees are added; and • the need to avoid any conduct that threatens the viability of the enterprise (Article 73 Law No 31/1990). Regarding the state of difficulty, the law does not pro - vide a specific moment when measures (eg, applying for a preventative procedure) must be taken. On the other hand, the law stipulates that within a maximum of 30 days of becoming aware of the state of insol - vency, a company is obliged to submit (through its
representatives) a request to the court to be subject to the provisions of Law No 85/2014. After opening the insolvency procedure, a special administrator is appointed. Starting from this moment, the mandate of the statutory directors/administrator ends. 7.2 Personal Liability of Directors Common law regarding companies (Law No 31/1990) provides the liability of administrators towards the company in certain situations. Separately, Law No 85/2014 regulates a particular liability on the part of members of the management bodies for the debtor’s insolvency, as well as for shareholders, if responsible. The first report prepared by the insolvency administra - tor/judicial liquidator describes the state of the com - pany and the causes that have generated the insol - vency, pointing out the persons responsible (if they can be identified). The managers/director of the company do not have a direct relationship with the creditors, but with the debtor. The managers are held liable for the activi - ties carried out before the insolvency procedure was opened and are responsible to all the creditors for the state of insolvency. The liability is essentially a joint one, but directors may prove the contrary, for exam - ple, by arguing that they opposed certain measures or that they were not part of the management body when the measures were taken. The law specifically provides the cases that entail the possible personal responsibility of these persons. Among these are: fictitious accounting, using the assets of the debtor for their own or a third party’s benefit; diverting or hiding parts of the debtor’s assets or fictitiously increasing its debts; paying or arranging preferential payments to a creditor, to the detriment of other creditors; etc. Liability can be found for part of, or for the entire debt, registered in the final table of creditors. The action can be brought by the judicial administra - tor/liquidator, the president of the creditors’ commit - tee, or by a creditor holding 30% of the total registered debt.
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