IN PURSUIT OF CREDITOR PROTECTION EFFECTIVENESS IN ROMANIAN BANKRUPTCY – EMPIRICAL AND LEGAL CONSIDERATIONS
IN PURSUIT OF CREDITOR PROTECTION EFFECTIVENESS IN ROMANIAN BANKRUPTCY – EMPIRICAL AND LEGAL CONSIDERATIONS

Summary/Abstract: The Romanian legal forums have generated much debate over the not so recent reform of the Insolvency Law (2014), generally focused on the legislative changes which were put in place in order to ensure the efficiency of the procedure. As there is little insight into the workings of the actual insolvency procedure, the present analysis aims to tackle a new perspective on the Romanian insolvency paradigm in the European and even global context. Thus, we have conducted a file-based study of the bankruptcy procedures of 100 Romanian companies, under the “new” bankruptcy regime by which we consider the application of the Romanian Insolvency provisions and their effectiveness in the national context. Our study offers an insightful look at an insolvency system in which the state, through its agencies, is the main creditor, therefore the possibility of a fresh start is (almost) inexistent and the main purpose of the liquidator’s actions is related to capital maximization without consideration to the continuation of the activity of the company. We conclude our study with a series of suggestions for the improvement of the efficiency of the insolvency procedure, based on our empirical findings.

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