The bankruptcy procedure represents the procedure applied to the debtor in which their assets are liquidated to cover the liabilities, followed by the removal of the debtor from the registry in which they are registered. The insolvency judge will order bankruptcy in the following cases:
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• The debtor has declared their intention to enter the simplified procedure;
• The debtor has not declared their intention for reorganization;
• Neither the judicial administrator nor the creditors have proposed a reorganization plan, or none of the proposed plans have been accepted and confirmed;
➡️ The debtor has declared their intention for reorganization, but has not proposed a reorganization plan or the proposed plan has not been accepted and confirmed.
➡️ Payment obligations and other assumed burdens are not fulfilled as stipulated
in the confirmed plan or the debtor’s conduct during their reorganization results in losses to their assets.
➡️ The judicial administrator’s report has been approved proposing, as appropriate, the debtor’s bankruptcy entry;
➡️ In case the application filed by the holder of an unpaid current claim against the debtor is admitted.
After bankruptcy entry, the judicial liquidator will notify all creditors whose claims have arisen after the opening date of the procedure, who will then submit a claim admission request, and the procedure described above regarding the preparation of the preliminary table will be resumed. Subsequently, after verification, the supplementary creditor table will be prepared, and after resolving all objections, the definitive consolidated table will be drawn up.
For the purpose of liquidating the assets, the judicial liquidator will seal the debtor’s stores, warehouses, offices, commercial correspondence, archives, information storage and processing devices, contracts, goods, and any other movable assets belonging to the debtor’s estate. Then an inventory will be drawn up, including all identified assets of the debtor, which will be signed by the judicial liquidator and the special administrator, if they participated in the inventory.
The assets will then be evaluated, and the evaluation report will be filed in the case file, with a notice of its submission and an abstract containing a summary being published in the Official Gazette. Subsequently, the judicial liquidator will convene the creditors’ meeting within a maximum of 15 days from the date of filing the evaluation report in the case file, to determine the type of sale.
Every 3 months, calculated from the start of the liquidation, the judicial liquidator will present to the creditors’ committee a report on the funds obtained from the liquidation and the collection of claims, as well as a distribution plan among creditors, if applicable. The report and plan are registered with the court clerk and published in the Official Gazette.
It should be noted that the distribution of the amounts resulting from the liquidation is done in the order provided by Article 161 of the Insolvency Law.
After the debtor’s estate has been liquidated, the judicial liquidator will submit a final report accompanied by the final financial statements to the insolvency judge.
The insolvency judge will convene the creditors’ meeting within a maximum of 30 days from the publication of the final report. Creditors may object to the final report at least 5 days before the meeting date. At the meeting, the insolvency judge will resolve, by ruling, all objections to the final report, approve it, or, if necessary, order appropriate modifications.
It is important that the bankruptcy procedure be followed step by step with the assistance of specialized professionals to maximize the chances of recovering the claims listed in the definitive creditor table.
For further information or any additional inquiries, please do not hesitate to contact us:
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We are here to assist and provide legal support for all your needs. We look forward to discussing with you.
Daniel Pavelescu – Attorney at Law