Judicial reorganization represents the procedure applied by the debtor against whom the insolvency procedure has been initiated and aims at settling his debts to the creditors listed in the definitive table of claims. This procedure involves the drafting, approval, confirmation, implementation, and compliance with a reorganization plan.
The reorganization plan may be proposed by the debtor within 30 days from the publication of the definitive table, provided that the intention to reorganize is formulated by the judicial administrator or by one or more creditors holding together at least 20% of the total value of the claims included in the definitive table of claims.
This plan shall include, as mandatory, the schedule of payments of the claims, the categories of claims not disadvantaged and the treatment of disadvantaged claim categories, as well as what compensations are to be offered to the holders of all categories of claims, compared to the estimated value that could be received through distribution in case of bankruptcy.
The execution of the reorganization plan shall not exceed 3 years, calculated from the date of confirmation of the plan. Payment terms established by contracts – including credit or leasing contracts – may be maintained through the plan, even if they exceed the 3-year period. These terms may also be extended, with the express agreement of the creditors, if initially they were shorter than 3 years. After all obligations under the plan have been fulfilled and the reorganization procedure has been closed, these payments will continue in accordance with the contracts from which they arise.
It is necessary for the plan to be approved by the creditors’ meeting, which will be voted based on the constitution of distinct categories of claims, each claim benefiting from a voting right, exercised by its holder in the category of claims to which the respective claim belongs.
These categories of claims are:
a) claims benefiting from preference rights;
b) wage claims;
c) budgetary claims;
d) claims of indispensable creditors;
e) other unsecured claims.
The plan shall be considered accepted by a category if in that category it is accepted by an absolute majority of the value of the claims in that category.
The plan is confirmed if it is accepted by at least 3 out of the 5 categories of claims mentioned above and provided that at least one of the disadvantaged categories accepts the plan and at least 30% of the creditor mass agrees with it.
If only 3 categories of claims are constituted, it is confirmed if it is accepted by at least 2 of them, and if 2 or 4 categories are constituted, it is confirmed if it is accepted by at least half of them. Additionally, the condition of the existence of at least one disadvantaged category agreeing with the plan and at least 30% of the creditor mass agreeing with the plan must also be met.
After the plan is approved, it will be filed by the judicial administrator with the court, and the syndic judge will set a deadline for its confirmation within a maximum of 15 days from the date of filing.
From the date of pronouncement of the confirmation judgment of the reorganization plan, the debtor’s activity is reorganized accordingly, and the claims and rights of the creditors and other interested parties will be modified according to the plan. In case of bankruptcy, the situation established by the definitive table of all claims will be reverted to, deducting the amounts paid during the reorganization plan.
The analysis of a reorganization plan, as well as the opportunity to approve it, is of vital importance in the insolvency procedure, as the recovery of the claim may depend on this aspect, at least partially. Thus, our company has the necessary experience in this regard and can guide you throughout the insolvency procedure.
For further information or any additional inquiries, please do not hesitate to contact us:
➡ Phone: (+4) 031 426 0745
📧 Email: office@grecupartners.ro
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
