On 2 October 2018, the Romanian Official Gazette published Government Emergency Ordinance, ("GEO 88/2018"), for the amendments of certain regulations in the field of insolvency and other legislation.
On October 2, 2018, the Official Gazette of Romania published GEO 88/2018 for the modification and supplementation of certain normative acts in the field of insolvency and of other normative acts, which instates significant changes related to the current conditions in which companies subject to the insolvency proceedings may access a part of the protection mechanisms provided by the law.
These changes were adopted by the Romanian Government in the context in which, only during the first seven months of this year, over 5,200 companies underwent insolvency proceedings.
During Thursday's meeting, the Romanian Government approved a draft Government Ordinance regulating certain fiscal-budgetary measures (Draft GO). The Draft GO tackles upon various matters such as (i) restructuring measures of budgetary duties outstanding as at 31 December 2017,(ii) amending certain provisions of the Romanian Fiscal Code and of the Romanian Fiscal Procedure Code, or (iii) repealing certain legislative provisions. Additionally, the Draft GO aims to amend particular provisions of Law no.
The Joint Venture represents a judicial-economic mechanism intended to facilitate certain activities and operations which none of the associates, taken separately, would have the necessary weight and means to properly accomplish.
The Romanian High Court of Cassation and Justice has ruled on April 4th, 2019 the decision no. 12 (Decision in the interest of the law) that put an end to the controversy over the legal regime of the expenses representing local taxes owed by the debtor for the immovable assets sold within the insolvency procedure.
This controversy has revolved around the question whether these taxes might be qualified either as budgetary receivables or expenses for the preservation of assets.
Many questions arise when a contractual partner enters into insolvency. One question is what happens with the debtor's ongoing contracts when the insolvency starts? Are they maintained or terminated?
One of the main principles governing insolvency proceedings states that the debtor's reorganisation should be sought before bankruptcy. To this end, the Romanian Insolvency Law (RIL) provides a series articles supporting the debtor's potential reorganisation.
Pursuant to the issuing by the Romanian government of Government emergency ordinance no. 91/2013 on the Insolvency Code, Ordinance that has been declared unconstitutional by the Romanian Constitutional Court in October 2013, Romanian Parliament adopted a new Insolvency Law (“New Law”), maintaining some of the valuable provisions of the unconstitutional Ordinance.
As of June 2014, the new Insolvency Law no. 85/2014 has modified the regime of financial leasing agreements in insolvency proceedings.
All in all, there are both good and bad news for leasing companies. Good news are mainly related to leasing companies’ right to terminate leasing agreements even after commencement of the insolvency proceedings, whilst bad news mainly concern newly imposed limitations on value of receivables that can be registered in insolvency by a leasing company.
Following a lengthy process which started in 2012 aiming to reform the Romanian insolvency framework as part of a wider judicial reformation program, the New Insolvency Law (Law no. 85/2014 regarding the prevention of insolvency and the insolvency proceedings) entered into force on 28 July 2014.
In 2014, Romania adopted a new insolvency law, which brings together under one piece of legislation all the procedures applicable to companies, groups of companies, credit institutions, insurance and reinsurance companies, as well as insolvency prevention and cross-border insolvency proceedings. Despite repeated legislative attempts, to date Romania does not have a legal framework for the insolvency of natural persons.