Romania needs a new Insolvency Code to prevent abuses

Newsroom 17/05/2013 | 11:29

As more debtors are intentionally filing for insolvency and attempt to block the vote of the main creditors, the enforcement of a new Insolvency Code could prevent such situations, said Marieta Avram, senior partner at the law firm STOICA & Asociatii, during a conference on the restructuring of non-performing loans and the relaunch of lending, organized earlier this week by Ziarul Financial business daily and STOICA & Asociatii.

According to ZF, the amount of debt of insolvent companies owed to banks rose to RON 10 billion (EUR 2.3 billion) by March, which was an eight fold increase over a year.

“The debtor is creating this confort. It chooses an insolvency practitioner and changes the headquarters so the insolvency case is trialed in a court where the insolvency practitioner is working. The debtor can even paralyze the voting right of a creditor through a legal action, including an abusive action,” said Avram.

In this context, the STOICA & Asociatii senior partner said that the enforcement of a new Insolvency Code is required, which could also include provisions for the bankruptcy of individuals.

Valeriu Stoica, founding partner of STOICA & Asociatii, said: “We still haven’t gone over the restraint, the inhibition state generated by the crisis in the past four years. Neither investors nor consumers and banks, haven’t gone over this state.”