Opening the insolvency procedure upon the debtors request
The new Law on insolvency, respectively Law no. 85/2014, was enforced on June 28th 2014. This provides new conditions that must be fulfilled for opening the insolvency procedure, upon the debtor’s request and also upon the creditor’s request.
According to art. 5 point 29 of Law no. 85/2014, the insolvency is that state of the debtor’s patrimony characterized by the insufficiency of the available money funds for paying the certain, liquid and outstanding payments, being a situation of the debtor’s treasury and not of its patrimony.
The presumption of clear insolvency is instituted when this, after 60 days from the due date, has not paid its debt towards the creditor. In exchange, the insolvency is imminent when it is proved that the debtor cannot pay on the due date the engaged outstanding debts.
The request for opening the insolvency procedure is compulsory for the debtor who is in a clear state of insolvency, for more than 30 days after its occurrence. But, if the debtor is still in completion of this term, in good faith, in extrajudicial negotiations for restructuring its debts, it has the obligation to address a claim to the law court in order to open the procedure in term of 5 days from the failed negotiations.
A novelty brought by the Law no. 85/2014 is that the debtor may request the opening of the insolvency procedure only in case their certain, liquid and outstanding debts due for over 60 days exceed the threshold value of 40.000 lei, although it requests the opening of the procedure due to the occurrence of the imminent state of insolvency.
According to the provisions of art. 67 of Law no. 85/2014, the request for opening the insolvency procedure shall be formulated in court or specialized court, in whose jurisdiction the debtor had its registered / professional office, for at least 6 months prior to the referral of the court.
The request for opening the insolvency procedure shall be formulated and signed, for legal persons, by the people that have the capacity of representatives, according to the Articles of Incorporation, their Status or by law.
In order to formulate a request for opening the general insolvency procedure or the simple bankruptcy procedure, it is required a resolution of the General Meeting of Shareholders or Associates.
According to the provisions of art. 69 of Law no. 85/2014, the legal persons debtors, who in the last 5 years prior to the resolution for opening the procedure have been subjected to a legal reorganization procedure, cannot be again subjected to a new reorganization procedure, and for such cases, it can only be opened the simplified procedure.
According to art. 66 paragraph (10) of law no. 85/2014, the claim shall be ruled immediately, in term of 10 days from its formulation, in the council chamber and without summoning the parties, in non-contentious procedure. For such case, the claim shall not be followed by the regulation procedure, as provided to art. 200 of the Civil Procedural Code.
Any other claims for opening the insolvency procedure, formulated before the claim addressed by the debtor shall be connected and re-qualified as admission request for the receivables, in case it shall be approved the debtor’s claim. If the debtor’s claim is dismissed, the requests formulated by creditors shall be solved in contentious procedure.
In case the bankruptcy judge shall approve the claim for opening the procedure, it shall assign a temporary legal administrator (in case of general procedure opening) or a temporary official receiver (in case of simplified procedure opening), who shall notify the debtor about opening the insolvency procedure on the debtor, by which the latter shall be informed also about the due term for the submission by the creditors of their claims against the claim for approving the receivables, for concluding and publishing in the Bulleting of the Insolvency Procedure of the preliminary table of receivables, the final term of the table of receivables and also the place, date and time of the first meeting of creditors.
In case the debtor’s creditors shall formulate, within the term of 10 days, oppositions to opening the insolvency procedure, the bankruptcy judge shall held, in term of 5 days, a session where there shall be summoned the legal administrator / official receiver, the debtor and the creditors who are against the opening of the procedure.
If the bankruptcy judge approves the formulated oppositions, it shall revoke the order for opening the insolvency procedure for the debtor. Otherwise, the insolvency procedure shall continue according to the provisions of Law no. 85/2014.
The debtor’s request, according to article 67 of Law 85/2014 should be accompanied by the following documents:
- Last annual financial accounts, certified by administrator and censor / auditor, the verification balance for the month prior to the registration date of the request of procedure opening;
- Full list of all debtor’s assets, including all the accounts and the banks where the debtor runs its funds; for the encumbered assets, there shall be mentioned the dates from the publicity registers;
- List of creditors’ names and addresses, however their receivables shall be: secured or conditioned, liquid or illiquid, due or not yet due, uncontested or contested, showing the amount, cause and preference rights;
- The list containing the payments and patrimony transfers performed by the debtor in the last 6 months prior to the registration of the introductive request;
- Profit and loss account for the year prior to the request submission date;
- List of the members of economic interest or, by case, of the associates with unlimited liability, for the collective companies and for limited partnerships;
- A declaration by which the debtor declares its intention to enter in simplified or reorganization procedure, according to a plan, by restructuring the activity or by liquidation, entirely or partially, of the estate, in order to extinguish its debts;
- A brief description of the methods that it considers for the activity reorganization;
- An affidavit, authenticated at the notary office or certified by a lawyer, or a certificate from the Register of Agricultural Companies, or, by case, the Trade Register Office or other registers in whose jurisdiction there is the professional / registered office, based on which it would result if it was previously subjected to the legal reorganization procedure, provided by this law, in the last 5 years prior to the formulation of the introductive request;
- An affidavit, authenticated by the notary or certified by a lawyer, by which it would declare that he or the administrators, directors and/or shareholders / associates / partners that have the debtor’s control have not been finally convicted for committing any intended office against the patrimony, of corruption and perjury, and for the offences provided by the Law no. 22/1969, with subsequent amendments, Law no. 31/1990, republished, with subsequent amendments, Law no. 82/1991, republished, with subsequent amendments, Law no. 21/1996, republished, with subsequent republished, with subsequent amendments, Law no. 571/2003, with subsequent amendments, Law no. 241/2005, with subsequent amendments, and the offences provided by this law in the last 5 years prior to opening the procedure;
- A certificate for approving the transactions on a regulated market of securities or other issued financial instruments (if the company is listed on a regulated market);
- A declaration by which the debtor shows if he is the member of a group of companies, specifying them;
- The proof of the sole registration code;
- The proof of notifying the competent tax body.