Romanian Law 85/2014 on pre-insolvency and insolvency proceedings
PARLIAMENT OF ROMANIA
CHAMBER OF DEPUTIES SENATE
LAW
on pre-insolvency and insolvency proceedings
The Parliament of Romania hereby adopts this law.
TITLE III. CROSS-BORDER INSOLVENCY
Art. 273
1) This title includes:
a) Norms for identifying the law applicable to an international private law relations in the matter of insolvency;
b) Procedural norms in litigations concerning international private law relations in the matter of insolvency;
c) Norms concerning the conditions under which qualified Romanian authorities require and offer, as appropriate, assistance in respect to the insolvency proceedings opened on the territory of Romania or of a foreign country;
2) For the purposes of this title, the international private law relations in the matter of insolvency are private law relations with cross-border element which are subject to settlement pursuant to the opening of the insolvency proceeding, under the conditions established by it.
Chapter 2 Relations with Non-Member States
Art. 274
1) This chapter is applicable in the following events:
a) Assistance is sought in Romania by a foreign court or a foreign representative in connection with a foreign insolvency proceeding;
b) Assistance is sought in a foreign state in connection with a proceeding under Romanian law;
c) A foreign proceeding and a proceeding under Romanian law in respect of any member of a group of companies as referred to in article 5, indent 35, are taking place concurrently;
d) Creditors or other concerned persons in a foreign state have an interest in requesting the opening in Romania of a proceeding according to this law or in participating in an open proceeding.
2) This chapter does not apply to an insolvency proceeding for which special provisions exist which derogate from the general jurisdiction law and which refer to:
a) Banks, credit cooperatives or other credit institutions;
b) Insurance/re-insurance companies and agents;
c) Financial investment services companies, undertakings for collective investments in securities, investment administration companies;
d) Stock exchange companies, members of commodities exchanges, clearing offices, clearing members of commodities exchanges, brokers, traders.
3) The international private law relations in the matter of insolvency which fall under the scope of the EC Regulation 1346/2000 are excluded from the scope of this title.
Art. 275
In case of discrepancy between the provisions herein and Romania’s obligations under any treaties, conventions, or any other form of bilateral or multilateral international agreement which Romanian is part to, then the provisions of that treaty, convention, or international agreement shall prevail.
Art. 276
The duties referred to in this chapter relating to recognition of foreign proceedings and cooperation with foreign courts fall on the tribunal, through the syndic judge, as well as on the Romanian representative, as follows:
A. The tribunal in the jurisdiction of which the debtor’s seat is located. For the purposes of this law, a foreign legal entity is considered to be seated in Romania also if it has a branch, agency, representative office, or any other unincorporated entity on the territory of Romania. In the event that the debtor has several seats in Romania, any of the tribunals in the jurisdiction of which the respective seats are located shall be qualified to rule on the matter;
B. If the debtor has no seat in Romania, jurisdiction shall be given:
a) To the tribunal or to any of the tribunals in the jurisdiction of which the real estate properties of the debtor are located, when the object of the petition includes real estate properties exclusively or along other assets;
b) To the tribunal in the jurisdiction of which is kept the register of incorporation of the ship or aircraft that forms the subject matter of the petition;
c) To the tribunal in the jurisdiction of which is located the Romanian company in which the debtor holds the securities that form the subject matter of the petition;
d) To the Bucharest Tribunal, if the subject matter of the petition consists in intellectual property rights protected in Romania, securities, treasury bond, state and municipal bonds belonging to the debtor;
e) If the subject matter of the petition consists in claims of the debtor against a person or a public authority, to the tribunal in the jurisdiction of which the domicile or residence or the seat of that person or of that public authority, respectively, is located.
Art. 277
A Romanian representative is authorized to act in a foreign state on behalf of a proceeding under Romanian law, as permitted by the applicable foreign law.
Art. 278
1) Romanian courts may refuse to recognize a foreign proceeding, to enforce a foreign court order adopted in such a proceeding, the decisions that result directly from the insolvency proceeding and are closely related to it, or to allow any other measure provided for herein, only in the event that:
a) The decision is the result of a fraud committed in the foreign proceeding;
b) The decision breaches the public order rules of international private Romanian law.
2) The breach of legal provisions within the meaning of par (1) represents a ground for refusal of such recognition.
Art. 279
The provisions of this title shall be supplemented, if compatible, with the provisions of Title VII of the Civil Code in respect to international private law provisions.
Art. 280
In the interpretation of this title, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.
Art. 281
A foreign representative is entitled to apply directly to a court in Romania or to the Romanian representative.
Art. 282
The foreign representative is entitled to apply to commence a proceeding under this law, if the conditions for commencing such a proceeding under Romanian law are otherwise met.
Art. 283
The foreign representative is entitled to apply to participate in a proceeding already opened against the debtor according to this law, only as of the date of recognition of the foreign proceeding.
Art. 284
The sole fact that an application pursuant to this chapter is made to a court in Romania by a foreign representative does not subject the foreign representative or the foreign assets and affairs of the debtor to the jurisdiction of the courts of Romania for any purpose other than the settlement of that application.
Art. 285
1) Foreign creditors have the same rights regarding the commencement of, and participation in, a proceeding open under this law as the Romania creditors.
2) Par (1) of this article does not affect the ranking of claims in a proceeding under this law, in case of bankruptcy. As regards claims of foreign creditors they shall not be ranked lower than the unsecured debts, save for the claims that fall under the category of claims subordinated to unsecured claims.
3) The provisions of this law shall apply mutatis mutandis to non matured claims and conditional claims.
4) The provisions of this law shall apply mutatis mutandis to claims that benefit of a preferential right in full or in part, which are not due on the date of registration of the proof of debt.
Art. 286
1) Notification shall be given to known foreign creditors and any procedural documents shall be served and notified to them according to this law. The court may order that appropriate steps be taken with a view to notifying any foreign creditor whose address is not yet known.
2) Such notification as referred to in par (1) shall be made to the foreign creditors individually, unless the court considers that, under the circumstances, some other form of notification would be more appropriate. No letters rogatory or other, similar formality is required.
3) When a notification of commencement of a proceeding is to be given to foreign creditors, the notification shall include the elements requested herein, including the minimum mandatory content of the proof of debt against the debtor’s estate.
Art. 287
1) A foreign representative may apply to the court in Romania for recognition of the foreign proceeding in which the foreign representative has been appointed. The court so notified shall examine ex officio whether it has jurisdiction according to article 276.
2) An application for recognition shall be accompanied by one of the following documents:
a) A certified copy of the decision commencing the foreign proceeding and appointing the foreign representative; or
b) A certificate from the foreign court affirming the existence of the foreign proceeding and of the appointment of the foreign representative; or
c) In the absence of evidence referred to in subparagraphs (a) and (b), any other evidence of the existence of the foreign proceeding and of the appointment of the foreign representative, acceptable to the court according to Government Ordinance 66/1999 on Romania’s accession to the Convention abolishing the requirement of legalization of foreign public documents adopted in the Hague, on October 5th, 1961, approved by Law no. 52/2000, as further amended, or according to any other treaties, conventions, or any other form of bilateral or multilateral international agreement which Romanian is part to.
3) An application for recognition shall also be accompanied by a statement identifying all foreign proceedings in respect of the debtor that are known to the foreign representative.
The court may, if it deems necessary, require a translation of documents supplied in support of the application for recognition into Romanian language.
Art. 288
1) If the decision or certificate referred to in article 287, par (2), subparagraphs a) and b), indicates that the foreign proceeding applied for recognition is a proceeding within the meaning of article 5, indent 49, and that the foreign representative is a person or body within the meaning of article 5, indent 56, the court is entitled to so presume.
2) The court is entitled to presume that documents submitted in support of the application for recognition are authentic, whether or not they have been legalized.
Art. 289
1) Subject to article 278, a foreign proceeding shall be recognized to the extent it meets the following conditions simultaneously:
a) The foreign proceeding is a proceeding within the meaning of article 5, indent 49;
b) The foreign representative applying for recognition is a person or body within the meaning of article 5, indent 56;
c) The application for recognition meets the requirements of article 287, par (2);
d) The application has been submitted to the court referred to in article 276;
e) There is reciprocity as to the effects of foreign decisions between Romania and the state of the court issuing the decision.
2) The foreign proceeding shall be recognized:
a) As a foreign main proceeding if it is taking place in the foreign state where the debtor has the center of its main interests;
b) As a foreign non-main proceeding if it is taking place in the foreign state where the debtor has an establishment within the meaning of article 5, indent 57.
3) An application for recognition of a foreign proceeding shall be decided upon at the earliest possible time. When notification was duly served, the trial may continue the next day or at short successive terms set with the parties being aware of them.
4) The court decides on the application for recognition after summoning the parties by issuing a decision that may be challenged in appeal.
5) The decision for recognition of the foreign proceeding has the relative authority of res judicata; the court may terminate of fully cancel it, as appropriate, to the extent that, pursuant to its issuance, the grounds and conditions for granting are found to have been were fully or partially lacking or have ceased to exist.
Art. 290
From the time of filing the application for recognition of the foreign proceeding, the foreign representative shall inform the court promptly of:
a) Any substantial change in the status of the foreign proceeding subject pending recognition or recognized, or the status of the foreign representative’s appointment; and
b) Any other foreign proceeding regarding the same debtor that becomes known to the foreign representative.
Art.291
1) From the time of filing an application for recognition and until the application is decided upon, the court may, at the request of the foreign representative, where relief is urgently needed to protect the assets of the debtor or the interests of the creditors, grant relief of a provisional nature, including:
a) Staying the acts, operations and any other individual execution measures against the debtor’s assets;
b) Entrusting the administration, conservation or realization of all or part of the debtor’s assets located in Romania to the foreign representative or another person designated by the court, in order to protect and preserve the value of assets that, by their nature or because of other circumstances, are perishable, susceptible to devaluation or otherwise in jeopardy;
c) Any other relief referred to in article 293, par (1) letter c), d) and g).
2) Decision shall be made in respect to the application referred to in par (1) by summoning the interested parties.
3) Unless extended under article 293, par (1), letter f), the relief granted under par (1) of this article terminates when the application for recognition is decided upon.
4) The court may refuse to grant relief under par (1) if such relief would interfere with the proper administration of a foreign main proceeding.
Art. 292
1) Upon recognition of a foreign proceeding that is a foreign main proceeding, commencement of the following actions or applications, judicial or extrajudicial is stayed and if already commenced, they are lawfully suspended:
a) individual actions or individual proceedings concerning the debtor’s assets, rights and obligations;
b) acts, operations, and any other individual execution actions against the debtor’s assets.
2) At the request of a creditor holding a preferential claim according to this law, the court may remove the suspension referred to in par (1) according to the Romanian law.
3) Starting on the date referred to in par (1) exercise of the right to sell, encumber or otherwise dispose of the debtor’s asset is suspended. The deeds concluded in breach of these provisions are lawfully void.
4) Exercise by the debtor of its right to make acts, operations and payments in the ordinary course of its business for which the court may decide suspension according to article 293, is excluded from the scope of par (3).
5) Recognition of a main foreign procedure precludes commencement of the period of limitation for applications and proceedings under par (1) and, if already commenced, recognition of main foreign procedure represents a cause of interruption of the limitation period for those applications and proceedings.
6) Par (1) does not preclude the right to request the commencement of a proceeding under this law or the right to file proof of debts in such a proceeding.
Art. 293
1) After recognition of a foreign proceeding, whether main or non-main, where necessary to protect the assets of the debtor or the interests of the creditors, the court may, at the request of the foreign representative, grant any appropriate relief, including:
a) Staying the commencement or continuation of individual actions or individual proceedings concerning the debtor’s assets, rights and obligations, to the extent they have not been stayed or suspended under par (1), letter a), of article 291;
b) Staying execution against the debtor’s assets to the extent it has not been stayed or suspended under par (1), letter b) of article 291;
c) Suspending the right to transfer, encumber or otherwise dispose of any assets of the debtor to the extent this right has not been suspended under par (3) of article 292;
d) Producing evidence as to the debtor’s assets, legal deeds, rights or obligations as well as taking of evidence and causing a court officer to state a certain fact;
e) Entrusting the administration or realization of all or part of the debtor’s assets located in Romania to the foreign representative or another person designated by the court;
f) Extending relief granted under par (1) of article 291;
g) Granting any additional relief that may be available to the Romanian representative under this law.
2) After recognition of a foreign proceeding, whether main or non-main, the court may, at the request of the foreign representative, entrust the administration and realization of all or part of the debtor’s assets located in Romania to the foreign representative or another person designated by the court, provided that the court is satisfied that the interests of Romanian creditors are adequately protected.
3) In granting relief under this article to a representative of a foreign non-main proceeding, the court must be satisfied that the relief relates only to assets that, under the law of Romania, should be administered in the foreign non-main proceeding or concerns only information required in that proceeding.
Art. 294
1) In granting or denying relief under articles 291 or 293, or in modifying or terminating relief under par (3) of this article, the court must be satisfied that the interests of the creditors, of the debtor and of other interested persons, are adequately protected.
2) The court may subject relief granted under articles 291 or 293 to any conditions it considers appropriate.
3) The court may, at the request of the foreign representative or of another concerned person, or of its own motion, decide to modify or terminate the relief granted under article 291 or article 293.
Art. 295
1) Upon recognition of a foreign proceeding, the foreign representative has standing to initiate actions meant to render ineffective the debtor’s acts detrimental to its creditors that are available to the Romanian representative and, as appropriate, actions for voidance or nullity according to this law.
2) When the foreign proceeding is a foreign non-main proceeding, the court must be satisfied that the action relates only to assets that, under the law of Romania, should be administered in the foreign non-main proceeding.
Art. 296
Upon recognition of a foreign proceeding, the foreign representative may, provided that the other requirements of the Romanian law are met, have standing to intervene in any applications or proceedings, whether judicial or extrajudicial, in which the debtor is a party.
Art. 297
1) In matters referred to in article 274, the Romanian courts shall cooperate to the maximum extent possible with foreign courts or foreign representatives, either directly or through the Romanian representative.
2) The court is entitled to communicate directly with, or to request information or assistance directly from, foreign courts or foreign representatives.
Art. 298
1) In matters referred to in article 274, a Romanian representative shall, in the exercise of its functions and subject to the supervision of the court, cooperate to the maximum extent possible with foreign courts or foreign representatives.
2) The Romanian representative is entitled, in the exercise of its functions and subject to the supervision of the court, to communicate directly with foreign courts or foreign representatives.
Art. 299
Cooperation referred to in articles 297 and 298 may be implemented by any appropriate means, including:
a) Appointment of a person or body to act at the direction of the court;
b) Communication of information by any means considered appropriate by the court;
c) Coordination of the administration and supervision of the debtor’s assets and affairs;
d) Approval or implementation by courts of agreements concerning the coordination of proceedings;
e) Coordination of concurrent proceedings regarding the same debtor.
Art. 300
After recognition of a foreign main proceeding, a proceeding under this law against the same debtor may be commenced according to this law and only if the debtor has a seat Romania. The effects of the proceeding referred to herein shall be restricted to the assets of the debtor that are located in Romania and, to the extent necessary to implement cooperation and coordination under articles 297 – 299, to other assets of the debtor that, under the law of Romania, should be administered in that proceeding.
Art. 301
Where a foreign proceeding and an insolvency proceeding under the Romanian law are taking place concurrently regarding the same debtor, the court shall seek cooperation and coordination under articles 297 – 299, and the following shall apply:
A. When the application for recognition of the foreign proceeding is filed after commencement of the insolvency proceeding in Romania:
a) Any temporary relief granted under article 291 or 293 must be consistent with the insolvency proceeding in Romania; and
b) If the foreign proceeding is recognized in Romania as a foreign main proceeding, article 295 does not apply;
B. When the application for recognition of the foreign proceeding is admitted or only filed before commencement of the insolvency proceeding in Romania:
a) Any temporary relief in effect under article 291 or 293 shall be reviewed by the court and shall be modified or terminated if inconsistent with the insolvency proceeding in Romania; and
b) If the foreign proceeding is recognized as a foreign main proceeding, the stay and suspension referred to in par (2) of article 292 shall be modified or terminated pursuant to par (1) and (3) of article 292 if inconsistent with the insolvency proceeding in Romania;
C. In granting, extending or modifying temporary relief granted to a representative of a foreign non main proceeding, the court must be satisfied that the relief relates to assets that, under the law of Romania, should be administered in the foreign non-main proceeding or concerns only information required in that proceeding.
Art. 302
In matters referred to in article 274, in respect of more than one foreign proceeding regarding the same debtor, for which the provisions of EC Regulation 1346/2000 do not apply, the court shall seek cooperation and coordination under articles 297 – 299, and the following shall apply:
a) Any relief granted under articles 291 or 293 to a representative of a foreign non-main proceeding after recognition of a foreign main proceeding must be consistent with the foreign main proceeding;
b) When the application for recognition of a foreign non-main proceeding is admitted or only filed before recognition of a foreign main proceeding, any temporary relief in effect under article 291 or article 293 shall be reviewed by the court and shall be modified or terminated if inconsistent with the foreign main proceeding;
c) If several foreign non-main proceedings are recognized successively, the court shall grant, modify or terminate temporary relief for the purpose of facilitating coordination of the proceedings.
Art. 303
1) In the absence of evidence to the contrary, recognition of a foreign main proceeding is, for the purpose of commencing a proceeding under Romanian law, proof that the debtor is insolvent.
2) The provisions of par (1) do not apply if the recognized foreign proceeding is a non-main proceeding.
Art. 304
1) A creditor who has received part payment in respect of its claim in a proceeding pursuant to a law relating to insolvency in a foreign state may not receive additional payment for the same claim in a proceeding under Romanian law regarding the same debtor, so long as the payment to the other creditors of the same class is proportionately less than the payment the creditor has already received.
2) Par (1) does not prejudice the rights of holders of preferential claims.
Chapter III Rules on Coordination of Insolvency of Groups of Companies
Art. 305
Where the foreign proceeding and the proceeding under Romanian law refer to two or more companies of the same group of companies, the Romanian court and the Romanian representative, on the one hand, and the foreign court and the foreign representative, on the other hand, shall cooperate to the largest extent possible provided that such cooperation is beneficial to facilitate efficient coordination of proceedings, is not inconsistent with the applicable norms and does not result in a conflict of interests.
Art. 306
For cooperation between the Romanian representative and the foreign representative, in addition to the means referred to in articles 297 – 299 the Romanian representative shall, in exerting its powers and under supervision of the court, be entitled to
a) Communicate directly information and procedural documents in connection with the insolvency proceeding;
b) Analyze the possibility of group restructuring and, where this is available, to support the proposal, negotiation and application of a reorganization plan across the group, and it shall coordinate its efforts with the foreign representative;
c) Conclude a cross-border insolvency agreement with the foreign representative.
Art. 307
Upon recognition of the foreign proceeding of any of the group members, under the Romanian the foreign representative is entitled, under the Romanian proceeding of insolvency of one of the group members:
a) To be heard by the court and to participate especially in creditors meetings;
b) To propose a reorganization plan;
c) To apply for any reliefs available to the Romanian representative so long as all the other conditions are otherwise met under the Romanian law.
Art. 308
For cooperation purposes, in addition to the means referred to in articles 297 – 299 the Romanian courts shall cooperate with foreign courts, including by:
a) Coordination of the administration and supervision of the assets and affairs of the group companies;
b) Coordination of hearings including by scheduling common sessions;
c) Coordination of approval and implementation of the reorganization plan;
d) Communication of information or procedural documents regarding the Romanian proceeding of one of the group members;
e) Possibility to approve a cross-border insolvency agreement aimed at coordinating the insolvency proceedings;
f) Possibility to appoint a representative across the group in insolvency proceedings, yet checking the existence of a conflict of interests.
Art. 309
The cooperation between the Romanian courts on the one hand and the foreign courts and foreign representatives on the other hand shall not prejudice the principle of independence and unbiased character of the justice or of the rights and interests of the participants in the insolvency proceeding under the Romanian law.
Art. 310
The Romanian representative shall be able to enter into a cross-border insolvency agreement with the foreign representative based on the prior approval of the creditors meeting, under this law and subject to the conditions under the foreign law. This agreement may provide for:
a) Sharing of responsibilities, including by appointing one of the representatives as coordinating representative;
b) A modality for administration and supervision of the group members including in respect of daily activities;
c) The financing granted or to be granted after the commencement of the proceeding;
d) The modalities of administration, preservation or realization of assets;
e) The correlation between dates of creditors meeting;
f) Treatment of intra-group claims.
Art. 311
The applications for recognition and execution of foreign decisions commencing and closing insolvency proceedings, of foreign decisions adopted during the insolvency proceeding as well as of foreign decisions which directly result from the insolvency procedure and are closely related to it, filed before the effective date of this law, shall be decided according to the regulations in force on that date
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Art. 340
Any reference in laws or other norms to Law 85/2006 regarding the insolvency proceeding, as further amended and supplemented, or to Law 381/2009 on preventive concordat and ad-hoc mandate, as further amended, or to Government Ordinance 10/2004 on the bankruptcy of credit institutions, approved with amendments and supplemented by Law 278/2004, as further amended and supplemented, to sections 1-3 of Chapter III, to Chapter IV and article 83 of Law 503/2004, republished, as further amended and supplemented, or to Law 637/2002 regarding the international private law relations on insolvency matters, as further amended and supplemented, which are repealed by this law, shall be deemed to be references to this law.
Art. 341
Any preclusions, limitations, interdictions or the like established in laws or contractual provisions in respect of the commencement of the insolvency proceeding shall be applicable only from the date of opening of the bankruptcy proceeding. Any provisions to the contrary are repealed.
Art.342
1) The provisions of this law shall be in addition to the provisions of the Civil Procedure Code and of the Civil Code, to the extent they are compatible with them.
2) The provisions of Chapter I of Title III are not applicable to the international private law relations on insolvency matters which fall under the scope of application of the Council Regulation (EC) no. 1346/2000
Art.343
Proceedings commenced before the date this law becomes effective shall continue to be subject to the law in force before that date.
Art. 344
On the effective date of this law, the following shall be repealed:
a) Law 85/2006 regarding the insolvency proceeding, published in the Official Gazette of Romania, Part I, No 359 of April 21st, 2006, as further amended and supplemented;
b) Law 381/2009 on preventive concordat and ad-hoc mandate, published in the Official Gazette of Romania, Part I, No 870 of December 14th, 2009, as further amended and supplemented;
c) Government Ordinance 10/2004 on the bankruptcy of credit institutions, published in the Official Gazette of Romania, Part I, No 84 of January 30th, 2004, approved with amendments and supplements by Law 278/2004, as further amended and supplemented;
d) Sections 1-3 of Chapter III, Chapter IV and article 83 of Law 503/2004 on financial recovery, bankruptcy, dissolution and voluntary liquidation of insurance undertakings, published in the Official Gazette of Romania, Part I, No 453 of July 23rd, 2013, as further amended and supplemented,
e) Law 637/2002 regarding the international private law relations on insolvency matters, published in the Official Gazette of Romania, Part I, No 931 of December 19th, 2002, as further amended and supplemented;
f) Article 175 of Law 187/2012 for the application of Law 286/2009 on the Criminal Code, published in the Official Gazette of Romania, Part I, No 757 of November 12th, 2012, as further amended and supplemented, as well as article 81 of Law 255/2013 for the application of Law 135/2010 on the Criminal Procedure Code and for modification and supplementing of some norms that refer to criminal procedural measures, published in the Official Gazette of Romania, Part I, No 515 of August 14th, 2013;
g) Any other provisions to the contrary.
This law was adopted by the Parliament of Romania, subject to the provisions of article 75 and of article 76, par (1), of the Constitution of Romania, republished.