Frequently asked questions

The answer depends on what has preceded this moment. If the inability to pay is isolated — a collection lag, a delay on a major contract — and the remaining indicators are healthy, the preventive instruments under Law no. 85/2014 offer breathing space without full publicity: the ad-hoc mandate (arts. 10–15) is fully confidential, while preventive composition (arts. 16–37, as reshaped by Law no. 216/2022) suspends enforcement actions and allows structured negotiation with the principal creditors. If, however, the difficulty is structural — accumulated debts exceed the real cash-generating capacity, and recovery within 12 months is unrealistic — the deadline under art. 66 (2) has already started to run: 30 days from the onset of insolvency for the debtor to file the opening petition.

The critical decision over these days is not whether to act, but what must not be done under pressure. Preferential payments to related creditors (shareholders, affiliated parties, suppliers with personal ties) fall within the 6-month suspect period under art. 117 and may later be set aside, while at the same time exposing management to personal liability. Likewise, asset transfers, the constitution of security for pre-existing debts, or advance payments made within this window are exposed to judicial review.

The professional recommendation, on a 5–7 day calendar, is: obtain a clear picture of obligations due and falling due in the next 30–60 days, assess the appropriate instrument with a practitioner, and avoid any operation with related parties until the option is clarified. A consultation in this window directly determines the range of solutions still available two weeks later.

A notice of acceleration is not equivalent to enforcement. Between the moment of notification and the actual commencement of enforcement there is a window — sometimes a few days, sometimes a few weeks — in which options remain open. Two instruments are relevant.

The first is negotiation with the bank outside the procedural framework — a rescheduling, a standstill agreement, a contractual restructuring. This works when the difficulty is perceived as temporary and when the bank assesses that negotiated recovery exceeds recovery through enforcement against collateral. In financial practice, this moment is often the most appropriate for engagement, before formal enforcement is initiated.

The second instrument is to invoke a procedural mechanism that suspends enforcement. Preventive composition, once judicially confirmed, suspends both individual enforcement and limitation periods (art. 32 (5) et seq.). The opening of insolvency proceedings produces, under art. 75, the automatic stay of all judicial and extrajudicial actions and of any enforcement measure — including against secured assets. The essential difference: the composition requires a structured agreement with a qualified majority of creditors and is compatible with the debtor retaining operational control; insolvency entails broader publicity and oversight by the judicial administrator.

The choice between these routes depends on what the bank loan represents within the overall debt structure and on the relationship with the other creditors. Where the bank is the dominant creditor, the contractual route should be explored first. Where the difficulty is systemic, the procedural route offers a complete framework of protection rather than a localised postponement.

The deadline to challenge the creditor's petition is 10 days from service (art. 72 (3)). This interval largely shapes the subsequent path.

Two strategies coexist, and the choice depends on the debtor's actual condition. The first — challenging the petition — is viable where the asserted claim is not certain, liquid and due, where the threshold value of 50,000 RON is not met, where there is a pending substantive challenge to the claim, or where the presumption of insolvency (60 days from the due date) can be rebutted by proof of available funds. The challenge must be filed in time, rigorously reasoned and supported by documentary evidence.

The second — filing one's own petition with the intention of reorganisation — becomes relevant where challenge is unrealistic, but reorganisation is viable. Under art. 67 (1) (g), the debtor may declare the intention of reorganisation in the very opening petition, thereby preserving the right to propose a plan within 30 days of publication of the final claims table (art. 132 (1) (a)). This solution converts proceedings opened on a creditor's initiative — implicitly aimed at liquidation — into proceedings with a reorganisation vector, proposed by the party who knows the business best.

In these 10 days, the assessment must cover: the legal reality of the asserted claim, the possibility of a swift agreement with the petitioning creditor (withdrawal of the petition is possible under art. 71), the viability of a reorganisation, and the quality of the practitioner to be proposed for appointment. Decisions made under time pressure, without specialist assistance, systematically narrow the available options.

The personal liability of directors for the company's insolvency is governed by art. 169 of Law no. 85/2014 and is engaged in seven exhaustively listed cases: use of corporate assets for personal purposes, fictitious accounting or disappearance of records, diversion or concealment of assets, contracting excessive obligations, preferential payment of a creditor, diversion of funds against the company's interest, keeping non-compliant accounting — and, generically, any act which contributed to the state of insolvency.

Two of these cases typically expose directors who continue activity after the onset of insolvency.

Continuing in personal interest an activity that manifestly leads to cessation of payments occurs where management persists in operations with accumulated losses despite knowing recovery is impossible. The documentation later examined — board minutes, decisions of the corporate bodies, internal reports — may support or rebut the hypothesis of justified continuation.

Preferential payment of a creditor arises where, faced with insufficient funds, the director chooses to settle selective obligations — to affiliated parties, to creditors with personal ties, to categories favoured without basis. The qualification of such payments as preferential is a technical exercise that does not depend on the declared intent but on the economic effect.

To these two risks one must add the effect of HCCJ binding ruling no. 14/2022: failure to deliver the accounting records to the judicial administrator/liquidator gives rise to a presumption of fault and causation that reverses the burden of proof.

The practical inflection point — the moment when continuing operations becomes materially riskier than opening proceedings — appears when liabilities exceed realisable assets, or when cash flow no longer covers current obligations plus a reasonable share of legacy debt. An independent assessment in this window is, in practice, the most effective means of protecting the personal position of management.

The recommendation to "move the business" onto a new entity is, in its frequent formulation, a course of action that simultaneously exposes the person executing it and the person advising it. Three procedural mechanisms can transform it, in retrospect, into an operation with severe material consequences.

The avoidance actions under arts. 117–122 target asset transfers carried out within the suspect periods of 6 months or 2 years preceding the opening. Sales below market value, contract assignments, the transfer of key personnel to an affiliated entity — all are operations exposed to annulment, with the obligation of restitution.

Personal liability under art. 169 is engaged both for diversion of assets and for use of corporate assets for personal purposes. "Moving" a business to a new company controlled by the same persons falls squarely within this hypothesis.

Criminal qualification may apply where the conduct realises the constituent elements of the offence of fraudulent bankruptcy (art. 241 Criminal Code) or related offences — fraud against creditors, tax evasion, forgery. Criminal qualification is not mutually exclusive with civil liability; the two cumulate.

The appropriate legal alternative is, depending on the case: voluntary liquidation under Law no. 31/1990 (where the company is solvent and an orderly cessation is sought), simplified insolvency proceedings (art. 38 (2), where reorganisation is unrealistic), or general proceedings with a reorganisation plan (where restructuring may generate value superior to liquidation). Each of these paths achieves a legitimate economic outcome without the exposures described above.

This question is, in our practice, one of the most frequent triggers for an early consultation. The cost of a correct assessment at this stage is disproportionately small compared to the cost of repairing the consequences of a wrong decision.

The opening of proceedings does not, in itself, terminate employment relationships, commercial contracts or client relationships. The production of effects depends on the type of procedure (general with reorganisation, simplified, bankruptcy) and on the decisions of the judicial administrator/liquidator in coordination with the bodies of the procedure.

Employees. Individual employment contracts are maintained. Collective dismissals, where they become necessary, follow the regime under the Labour Code, with the particularities applicable in insolvency (art. 86 of Law no. 85/2014). Wage claims benefit from a priority rank in distribution, for up to 6 months in arrears plus the related contributions (art. 161 (3)), and the Wage Claims Guarantee Fund may intervene under the law.

Ongoing supply contracts. Under art. 123, contracts in progress at the opening date are maintained as a matter of law. The judicial administrator/liquidator may decide to maintain or terminate the contracts, and the counterparty is entitled to request a written election within 30 days. Automatic termination clauses triggered by insolvency are null (art. 123 (4)) — a contractual creditor may not unilaterally end the relationship solely on the ground of the opening.

Clients. Filling pending orders, delivering products and providing services continue during the observation period, under the supervision of the judicial administrator. For a reorganisation with real prospects of success, preserving the commercial relationship with active clients is, as a rule, a priority — both from the perspective of cash flow and as an asset of the business serving as a means of payment further down the line.

In procedures prepared with rigour — anticipated communication with key partners, an operational plan for the first 30 days, possible bridge financing with super-priority (art. 87 (4)) — the disruption is significantly lower than in public perception. The difference is made by preparation prior to opening, not by reaction afterwards.

The framework is set by art. 39 of Law no. 85/2014 and the UNPIR protocols. The fee has two main components: a fixed monthly component for current activity, and a percentage component related to amounts recovered or distributed for the benefit of creditors.

At the opening stage, the judge-syndic sets a provisional fee in the opening judgment. Confirmation or modification is the prerogative of the creditors' meeting, at its first convening. In practice, the fee proposal is supported by a memorandum detailing the complexity of the case, the volume of the active and passive estate, the number and nature of creditors, the size of the inventory and realisation estate.

For procedures with an active estate insufficient to cover costs, the liquidation fund administered by UNPIR provides a supplementary payment system, subject to eligibility criteria.

For a debtor or a major creditor involved in the procedure, transparency over the fee structure — and over the ratio between the fixed and the success components — is a legitimate element of due diligence at the time of appointment or confirmation of the practitioner.

The simplified procedure (art. 38 (2)) applies to debtors for whom reorganisation is, by the very nature of the situation, excluded: companies without a known seat or with reduced assets, debtors dissolved before the petition, sole traders whose activity has ceased. The essential feature is the absence of the observation period and of the reorganisation phase — the debtor enters bankruptcy directly.

The practical consequences: a single claims table (the final one in the bankruptcy phase), a compressed calendar, a reduced volume of procedural documents, proportionally lower costs. For creditors with modest claims against such a debtor, recovery is, as a rule, marginal or nil; the procedural energy invested must be assessed accordingly.

Early identification of qualification under the simplified versus the general procedure is a distinct professional assessment, which influences both the practitioner's strategy and participants' expectations.

Under art. 42 (10), publication in BPI stands in lieu of summons, convocation and notification for all participants. This legal fiction turns the BPI into a publicity instrument with material effects: challenge deadlines run from publication, and the impossibility of invoking ignorance of the act is the rule.

Published documents cover the entire procedural cycle — the opening judgment, notification of creditors, the claims tables (preliminary, final, supplementary, consolidated), monthly reports of the judicial administrator, the reorganisation plan, confirmation judgments, auction notices, distribution reports, and the closing judgment. Challenge deadlines vary (3, 7, 15 days), and missing them is, practically, irreversible.

For a creditor or a debtor, systematic monitoring of BPI publications relating to cases of interest is not an optional task, but a duty of diligence. In BARIO S.P.R.L.'s practice, communication with interested parties supplements the official publication, but primacy remains with the published act, and the calculation of deadlines is by reference to the date of publication.

Provisional appointment lies with the judge-syndic through the opening judgment (art. 57), pending subsequent confirmation or replacement by the creditors' meeting. The relevant criteria, in established practice, include: registration on the UNPIR Roll, the absence of incompatibilities, the operational capacity to handle the case (volume, complexity, specialisation), prior experience in cases of similar nature and size, and effective availability for the estimated duration of the procedure.

For cases in which the debtor belongs to a specialised business sector, sectoral expertise is an additional element influencing acceptance of the mandate.

For appointment requests, BARIO S.P.R.L. may be contacted directly through the channels indicated in the Contact section, with a brief presentation of the case and the anticipated procedural calendar. Confirmation of availability and absence of conflicts of interest is provided as soon as possible.