Reorganization and insolvency
Because of contemporary economic realities, business sometimes goes differently than planned. So sometimes, a company no longer has the funds to pay its debts, in which case it can go bankrupt.
We offer our expertise in this area of practice both to creditors who have to recover debts from a company in insolvency and to debtors going through this procedure by:
Advice in pre-insolvency proceedings.
If your business has not gone according to plan and insolvency proceedings need to be opened, our team can help you with all the necessary steps from the pre-insolvency stage until the closure of the proceedings.
Law no. 85/2014 states that insolvency is the state of the debtor’s assets characterized by insufficient funds available for the payment of specific liquid and due debts, as follows:
- the debtor’s insolvency is presumed when he has not paid his debt to the creditor 60 days after the due date; the presumption is relative;
- Insolvency is imminent when the debtor proves unable to pay its debts when they fall due with the funds available on the due date.
Together we will analyze the company’s viability to determine its insolvency status. We will check whether your company is in a state of manifest insolvency and no longer has the funds to pay its debts or whether there are possibilities of recovery and continuation of activity in another form. Suppose it is necessary to open insolvency proceedings. In that case, we will assist you in preparing the file to be submitted to the competent court for the resolution of the application for the opening of insolvency proceedings, as well as the documents that the legislator has made mandatory.
Assistance and representation in insolvency proceedings.
Whether your business is about to enter insolvency or you are a creditor with a claim on the assets of a company presumed to be in insolvency, we will represent you throughout this procedure and help you through all the necessary steps.
Insolvency proceedings may be general or simplified, and the application for the opening of insolvency proceedings may be made by the debtor or by one or more of his creditors.
If your company becomes insolvent, you should know that you can apply for the opening of this procedure yourself, and the main effect is that the enforcement proceedings initiated by creditors will be suspended. Some penalties for not paying debts to creditors on time will no longer accrue. From this point on, the company is under the protection of the court, which seeks to ensure that the procedure is carried out legally, and per the regulations in force.
At the same time, according to the provisions of Law no. 85/2014, any creditor entitled to request the opening of proceedings, i.e., who has a claim on the debtor’s assets that is certain, liquid, and due for more than 60 days, in an amount greater than or equal to the threshold value, may file a request for the opening of proceedings against a debtor presumed to be insolvent.
Advice on company reorganization.
Our team will advise you on drawing up a recovery plan to cover your debts and represent you in negotiations on payment commitments.
The reorganization is a stage in the insolvency proceedings, i.e., a natural consequence of the insolvency proceedings, during which the debtor company can recover financially. This procedure is carried out by a liquidator or administrator appointed by a judge.
Judicial reorganization is the procedure applied to an insolvent debtor to pay debts following a schedule for the payment of claims contained in a reorganization plan voted by the creditors and confirmed by the court. The execution of the reorganization plan may not exceed three years, calculated from the date of its confirmation by the insolvency judge.
If the debtor will enter into general bankruptcy proceedings if the reorganization plan is not fulfilled or has not been voted on by the creditors or confirmed by the insolvency judge.
Recovery of debts by inclusion in the creditor’s list.
Our services also include assistance with debt recovery following the initiation of insolvency proceedings.
To be paid, creditors must prove their claims to the court or the body (usually an administrator or liquidator) responsible for reorganizing or liquidating the debtor’s assets.
You need to know that the judge sets a deadline for submitting the application for admission of claims, by which you must request payment of the claims. In order not to lose the right to claim payment of your debts, we will help you to draw up this request, submit it on time and thus have your claim admitted and be included in the creditor’s list.
Once proceedings are formally opened, creditors can no longer take individual steps to recover debts, which is necessary to ensure that all creditors are on an equal footing and to protect the debtor’s assets.
Representation in litigation concerning the liability of persons who caused the insolvency.
Suppose you want to bring personal liability against those you consider responsible for the company’s bankruptcy. In that case, we will help you draft the action in tort and look for the most conclusive evidence to support your claims.
As a rule, according to the principle of liability for one’s obligations, the claims of the legal debtor person are borne by the assets of the insolvent legal person and not by the assets of the partners or members of the legal person in question.
From this principle, Law No 85/2006 enshrines an exception that consists in the liability of the members of the management and supervisory bodies of the legal debtor person, as well as of any other person who caused the insolvency of the debtor.
For the persons who caused the debtor’s bankruptcy to be held liable, it is necessary for the insolvency administrator or the liquidator to bring an action against them and to support this action with evidence that can prove what is stated in the application.