[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN ROMANIA] 84
(i)
Reorganization, in which the debtor’s activity is reorganized in accordance with a reorganization plan, approved by the creditors. The plan may provide various measures, such as reducing the debt or rescheduling one or more due debts. The execution on the plan is limited to a period of 3 years, with the possibility of extending it. If the debtor is a legal entity, the execution of the plan is limited to a period of 4 years, instead of three, with the possibility of extending it, if the initial period of execution was less than 4 years. If the plan is successful, the debtor shall be reintegrated in the commercial circuit, and all debt reductions shall remain final. If the plan fails, the debtor enters the bankruptcy procedure (presented in point (ii) below), in which case the reduction of the debts is no longer valid, the creditors being entitled to recover their entire debt. Bankruptcy , in which the debtor’s assets are sold and all money obtained is distributed to creditors, in accordance with their priority rank, as indicated in the creditors’ list (e.g., secured creditors shall recover before unsecured ones).
observation period, as presented in point II.1 above. 2. (Depending on the type of the proceedings) The protection granted to the debtor against its creditors . The following questions should be addressed for each proceeding, provided by the law of the country: i) What kind of protection is granted? (e.g., the creditors may not enforce any court decision against the debtor’s assets, etc.) Restructuring agreement In addition to the measures negotiated with the creditors and expressly provided in the agreement, the law provides that once the restructuring agreement is confirmed by the court, and during its execution, no affected creditor may trigger an insolvency procedure against the debtor. Preventive agreement If the preventive agreement procedure is initiated, all the enforcement procedures against the debtor are suspended by law for a period of 4 months, which may be extended to 12 months from the moment the preventive agreement has started and until the restructuring plan is homologated. As an exception, wage-claim enforcement procedures shall not be suspended by law, but only upon the debtor’s request, if certain requirements are met. Moreover, during the suspension of the enforcement procedures against the debtor, until the homologation of the restructuring plan, all penalties, interest, and other expenses related to the debt will also be suspended. As of the moment the restructuring plan is homologated, the enforcement procedures regarding the affected claims against the debtor
(ii)
II.2.
Simplified procedure If the conditions are met, the court approves the request and initiates the simplified procedure, in which case the debtor enters the bankruptcy procedure directly, without going through the
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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