In a statement released Monday, the insolvency practitioner said Romanian corporate insolvency market includes 34,000 firms, the vast majority of which file for bankruptcy rather than try to reorganize activity and salvage their business.
It said creditors allocate EUR60 on average per month for each company, insufficient to insolvency procedure costs.
“Increasing the funds to finance the companies which undergo insolvency procedures would prompt some of the cash-stripped firms to choose reorganization over bankruptcy,” said Radu Lotrean, managing partner of Transylvania Insolvency House.
On the other hand, the high number of corporate insolvencies on the backdrop of the financial downturn has lead to an increase in insolvency practitioners, the company said.
It said insolvency practitioners have trouble capitalizing the assets of insolvent companies, particularly in the real estate sector, due to reduced demand.
“If the current trend continues over the next period, the costs to preserve and promote the assets will also increase,” the statement noted.
Transylvania Insolvency House is one of Romania’s top insolvency practitioners, with offices in nine cities nationwide and a portfolio that includes companies such as Leonardo, Flanco, Diverta and Tiago Mall.
So far, the company has managed some 500 insolvency or voluntary liquidation cases.