CANCELLATION OF FRAUDULENT ACTS CONCLUDED BY THE DEBTOR IN THE CONTEXT OF LAW NO. 85/2014
CANCELLATION OF FRAUDULENT ACTS CONCLUDED BY THE DEBTOR IN THE CONTEXT OF LAW NO. 85/2014

Summary/Abstract: The cancellation of the debtor's fraudulent acts and operations from the suspicious period is a procedure regulated by articles 117 - 122 of Law number 85/20141, aiming to restore the assets of the debtor in insolvency proceedings, by sanctioning the fraud of the creditors' interests through acts which, by their nature, are valid, yet having a revocable character. Unlike the common law revocation action, which, according to art. 1565 Civil Code2, has as its effect only the unenforceability of the act against the creditor who requested the revocation, the specific procedure regulated by Law no. 85/2014 provided broader effects for such an action, which lead to the total dissolution of the legal act concluded in defrauding creditors, effects that occur against the entire creditor group that has the possibility to participate in the amounts resulting from the capitalization of these assets. Also, Article 117 of Law No. 85/2014 establishes a presumption of fraud with regard to legal acts having as their object goods or other values belonging to the assets of the debtor in liquidation. The only conditions required by law for such an action to be admitted are: the fraudulent act must have been concluded in the 2 years prior to the opening of the insolvency procedure and the complicity in the fraud of the parties involved in the respective legal operation. The "suspect period" represents the time interval before the opening of the insolvency procedure, the legislator attaching to this period a presumption of fraud which is justified by the need to protect creditors from acts concluded by the debtor to their detriment. Art. 118 para. (1) of Law no. 85/2014 provides that the action for the annulment of fraudulent acts concluded by the debtor to the detriment of the creditors, provided for in art. 117, may be brought by the judicial administrator/judicial liquidator within one year from the date of expiry of the deadline established for the preparation of the report provided for in art. 97, but no later than 16 months from the date of opening the procedure. In the event of the admission of the action, the parties will be restored to their previous situation, and the charges existing on the date of the transfer will be re-registered. As such, fraud does not have to be proven, the debtor or his co-contractor having to overturn this presumption.

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