Under the Romanian law, insolvency is defined as the state of the debtor’s patrimony characterized by the insufficiency of available funds for the payment of the certain due, liquid and exigible debts. The insolvency is presumed as being obvious when the debtor, after 60 days as of maturity, has failed to pay his debt to the creditor; the presumption shall be relative. The insolvency is imminent when it is proved that the debtor is not able to pay by the due date the exigible debts employed, with available funds on the maturity date. Insolvency proceedings in Romania are always judicial proceedings held by competent bankruptcy court, which makes decisions and oversees the entire procedure.
The subjects participating in the proceedings include the debtor, creditors claiming their receivables, bodies representing the creditors (creditors’ meeting and creditors’ committee, bankruptcy court through a judge special designated – the syndic judge, and insolvency practitioner. Under the Romanian law, insolvency proceedings can only be commenced upon filing an insolvency petition by a legitimate person who initiates the insolvency proceedings:
- Voluntary filing: the insolvency petition is filed by the debtor or its management
- Creditor filing: the insolvency petition is filed by any of its unpaid creditors.
The insolvency proceedings are formally commenced when the competent bankruptcy court through the syndic judge issues a decision declaring the insolvency of a debtor and commencing insolvency proceedings against such debtor.
General insolvency proceedings are the proceedings whereby a debtor shall enter, after an observation period, successively, in the judicial reorganization proceedings and bankruptcy proceedings or, separately, only in judicial reorganization or only in bankruptcy proceedings.
Simplified insolvency proceedings are the proceedings whereby a debtor goes straight into bankruptcy proceedings, either at the same time with opening the insolvency proceedings, or after an observation period of maximum 20 days, while the elements shown in law are examined.