Under the new regulations, an entity is considered insolvent if its exigible debts to creditors are overdue by more than 60 days, instead of 90 days currently. Insolvency is imminent if it is obvious the debtor will not be able to pay its debts in due time.
The Code’s article 81, which sparked scathing attacks from NGOs, states that the license of television and radio companies that go insolvent is suspended from the start of insolvency proceedings until the approval of their reorganization plan.
NGOs ActiveWatch and Reporteri fara Frontiere condemned the lack of transparency in adopting the new Insolvency Code, which has been adopted through an emergency ordinance instead as a bill needing debate and a vote in Parliament. The two NGOs argue that article 81 “threats the freedom of the media and the public’s right to be informed.”
Valentin Jucan, member in the National Audiovisual Council (CAN), said Saturday the ordinance is “undemocratic and unconstitutional” and called on CNA head Laura Georgescu to resign for avoiding public debates on the provisions targeting the media.
Also, opposition Democratic Liberal Party leader Vasile Blaga said Friday the party will address the matter to European Commission vice-president Viviane Reding, arguing that some of the Code’s provisions are aimed to “repress the media.”
Under the new regulations, requests to start insolvency proceedings may be filed only for debts equal to or higher than 40,000 lei (some EUR9,000). The threshold is valid for both debtors and creditors.
Reorganization plans may be proposed by the debtor, following approval by shareholders, if proceedings were started at its request, by the court-appointed administrator or by creditors holding at least 20% of the total value of receivables.
Debtors who had filed for insolvency over the past five years may not propose reorganization plans.
Reorganization will be carried out in one year and the process may be extended only by 12 months.
The plan is validated only if it is approved by creditors owning at least 50% of all receivables.
Managers who cause a firm to enter insolvency will have to cover partially or totally the debts registered by the firm from their own pocket and will not be allowed to run other companies for ten years.
The creditor which holds over 50% of all receivables may name, without consulting the other creditors, a legal administrator or liquidator to replace the interim one. (EUR1=RON4.4306)