1. Business Rescue (Turnaround)

Business turnaround strategies are in increased demand due to the global economic downturn. DBP advisors can assist clients facing strategic management challenges often associated with the global economy. Under Romanian Law, turnaround may be achieved either by extra judicial procedures […]

Details

2. Bankruptcy

Bankruptcy proceedings (or liquidation) essentially aim at liquidating all of the debtor’s assets with a view to covering its receivables. This is either when the debtor cannot successfully implement a reorganization plan or due to various reasons there is no interest for a restructuring […]

Details

3. Company Closure

Voluntary liquidation is when a company decides to dissolve itself on its own terms, as approved by the shareholders of the company. The decision usually occurs when a company decides that it has no reason for operating anymore, or if it is not feasible to operate anymore. […]

Details

4. Special Trustee services

Within 10 days from the commencement of the general proceedings (or as the case may be, from the date the debtor’s right to manage its estate has been withdrawn), the shareholders’ meeting of the debtor (or its sole shareholder) must appoint a special trustee (legal or natural person). […]

Details

5. Cross border insolvency

Many of our clients are international clients acting either regionally or even globally. The cross-border insolvencies bring a lot of complexity to the cases as it entails a close cooperation between the participants to the procedures in the relevant jurisdictions. […]

Details

1. Business Rescue (Turnaround)

Business turnaround strategies are in increased demand due to the global economic downturn. DBP advisors can assist clients facing strategic management challenges often associated with the global economy. Under Romanian Law, turnaround may be achieved either by extra judicial procedures […]

Details

2. Bankruptcy

Bankruptcy proceedings (or liquidation) essentially aim at liquidating all of the debtor’s assets with a view to covering its receivables. This is either when the debtor cannot successfully implement a reorganization plan or due to various reasons there is no interest for a restructuring […]

Details

3. Company Closure

Voluntary liquidation is when a company decides to dissolve itself on its own terms, as approved by the shareholders of the company. The decision usually occurs when a company decides that it has no reason for operating anymore, or if it is not feasible to operate anymore. […]

Details

4. Special Trustee services

Within 10 days from the commencement of the general proceedings (or as the case may be, from the date the debtor’s right to manage its estate has been withdrawn), the shareholders’ meeting of the debtor (or its sole shareholder) must appoint a special trustee (legal or natural person). […]

Details

5. Cross border insolvency

Many of our clients are international clients acting either regionally or even globally. The cross-border insolvencies bring a lot of complexity to the cases as it entails a close cooperation between the participants to the procedures in the relevant jurisdictions. […]

Details

DBP Insolvency and Restructuring S.P.R.L. (shortly “DBP”) is a company for turnaround and judicial restructuring founded by two insolvency practitioners who have been active both on the insolvency market and on the legal market for over 19 years.

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© Copyright 2024 – DBP Insolvency and Restructuring
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DBP Insolvency and Restructuring S.P.R.L. (shortly “DBP”) is a company for turnaround and judicial restructuring founded by two insolvency practitioners who have been active both on the insolvency market and on the legal market for over 19 years.

Policies

Contact

© Copyright 2024 – DBP Insolvency and Restructuring
Made by JURIDICE.ro

Contact

Policies

DBP Insolvency and Restructuring S.P.R.L. (shortly “DBP”) is a company for turnaround and judicial restructuring founded by two insolvency practitioners who have been active both on the insolvency market and on the legal market for over 19 years.

© Copyright 2024 – DBP Insolvency and Restructuring
Made by JURIDICE.ro

Business Rescue (Turnaround)

Business turnaround strategies are in increased demand due to the global economic downturn. DBP advisors can assist clients facing strategic management challenges often associated with the global economy. Under Romanian Law, turnaround may be achieved either by extra judicial procedures, often by negotiating and reaching an agreement with various creditors, lenders, by restructuring budgetary claims and so on.

A company turnaround consultant corrects business losses, bad debt structures, cash shortfalls, and other factors that have put the business into its cash crisis. Crisis management is very much different from normal business management. A turnaround consultant will prioritize your cash flow management, work with your lenders, and do what is needed to get your business back on track – and poised for new growth.

Our team is often called to support companies facing challenges and more specifically financial distress to achieve yet again healthy cash flow and turn the company back on track.

1.1 Restructuring agreement
1.2 Creditors’ arrangement
1.3.1 Pre insolvency analysis
1.3.2 Restructuring
1.1 Restructuring agreement
1.2 Creditors’ arrangement
1.3.1 Pre insolvency analysis
1.3.2 Restructuring

Bankruptcy

Bankruptcy proceedings (or liquidation) essentially aim at liquidating all of the debtor’s assets with a view to covering its receivables. This is either when the debtor cannot successfully implement a reorganization plan or due to various reasons there is no interest for a restructuring. Duration of such procedure of course is strongly linked to how liquid the debtor’s estate really is.

Our team has handled the bankruptcy of Petromar Resources SRL, Secvision Business Solutions SRL and so on.

In the decision by way of which the debtor is placed into bankruptcy proceedings, the bankruptcy judge shall also pronounce the following: (A) the withdrawal of the debtor’s right to manage its estate; (B) the appointment of the liquidator; (C) the term until the debtor/ judicial administrator has to hand over the management of the debtor’s estate to the liquidator (together with a complete list of all actions performed after the commencement of the proceedings); (D) the notification regarding the commencement of the bankruptcy proceedings; (E) a complete list with all the creditors and their contact details with the indication of all the debts which arose after the commencement of the proceedings.

In case the debtor undergoes bankruptcy after confirmation of a reorganization plan, the creditors will participate in the bankruptcy proceedings with the amounts registered in the reorganization plan less the sums already distributed to them.

Transactions between the confirmation date of the reorganization plan and the commencement of the bankruptcy proceedings are presumed to be fraudulent except when the contracting party proves its good faith (tr. buna credinta) when concluding the transaction. Any gratuitous transactions (tr. acte cu titlu gratuit) are null and void.

As a general rule, liquidation starts once an inventory is completed. The liquidation of the debtor’s estate is performed by the liquidator under the supervision of the bankruptcy judge and of the creditors.

The main goal of the liquidation is to maximize the proceeds from the debtor’s estate. In principle, the sale of the debtor’s assets shall be performed through tender proceedings. However, direct negotiation may be allowed under certain circumstances.

Moneys resulting from liquidation are subject to (partial) distribution to the creditors already during the procedure. At the closing of the liquidation, the final distribution takes place

Company Closure

Voluntary liquidation is when a company decides to dissolve itself on its own terms, as approved by the shareholders of the company. The decision usually occurs when a company decides that it has no reason for operating anymore, or if it is not feasible to operate anymore. The key factor here is that the dissolution of the company is not ordered by a court but a procedure conducted with the Trade Registry.

Special Trustee services

Within 10 days from the commencement of the general proceedings (or as the case may be, from the date the debtor’s right to manage its estate has been withdrawn), the shareholders’ meeting of the debtor (or its sole shareholder) must appoint a special trustee (legal or natural person).

As long as the debtor’s right to manage their estate has not been withdrawn, the special trustee shall direct the debtor’s activity. If the powers of the debtor’s management to manage the estate have been withdrawn, the management of the debtor’s assets is taken over by the judicial administrator (tr. administrator judiciar), and the competencies of the special trustee are limited to representing the debtor’s shareholders’ interests in the insolvency proceedings.

Our team has acted as special trustee in insolvency cases in both scenarios mentioned hereinabove.

Cross border insolvency

Many of our clients are international clients acting either regionally or even globally. The cross-border insolvencies bring a lot of complexity to the cases as it entails a close cooperation between the participants to the procedures in the relevant jurisdictions.

Our team members have handled one of the first cross-border insolvencies in Romania and have handled several cross-border reorganizations and bankruptcies, such as Nortel Networks, Alitalia, Goldplast.

According to Art. 3 Para. 1 of the Regulation (EU) 2015/848 (“Regulation”), the courts of the Member State within the territory of which the center of the debtor’s main interests is situated shall have jurisdiction to open insolvency proceedings (“main insolvency proceedings”).

The center of main interests shall be the place where the debtor conducts the administration of its interests on a regular basis, and which is ascertainable by third parties. In the case of a company or legal person, the place of the registered office shall be presumed to be the center of its main interests in the absence of proof to the contrary. That presumption shall only apply if the registered office has not been moved to another Member State within the 3-month period prior to the request for the opening of insolvency proceedings.

Also, according to Art. 3 Para. 2 of the Regulation, where the center of the debtor’s main interests is situated within the territory of a Member State, the courts of another Member State shall have jurisdiction to open insolvency proceedings against that debtor only if it possesses an establishment within the territory of that other Member State. The effects of those proceedings shall be restricted to the assets of the debtor situated in the territory of the latter Member State.

Given this, the recognition of the main insolvency proceedings shall not preclude the opening of the proceedings referred to in Article 3(2) by a court in another Member State. The latter proceedings shall be secondary insolvency proceedings, being governed by the provisions of Chapter III from the Regulation.

1.1 Restructuring agreement

Through the restructuring agreement, companies can address issues quickly and tailored to specific needs, in a regulated negotiation framework, allowing them to restructure their business and debts. The key issue in such scenario is to act preventive and on an early stage to avoid financial distress or even payment cessation.

This is a relatively new procedure, in this aspect EU Directive no. 2019/1023 coming to replace the ad hoc mandate procedure, retained by the practice as ineffective and used quite rarely by debtors. In the ad hoc mandate procedure, the debtor could have filed a request for the appointment of an ad hoc trustee with the president of the Tribunal. The object of the ad hoc mandate was to conclude, within 90 days of appointment, a settlement between the debtor and one or several of its creditors, in view of overcoming the state of difficulty of the debtor’s business.

The restructuring agreement represents, in fact, a contract proposed by the debtor and negotiated between the debtor and its creditors for the recovery of the business, there being similarities with the judicial reorganization plan both in terms of the data it must contain and in terms of voting by categories of creditors. After the creditors’ vote, the restructuring agreement must be confirmed by the syndic judge, in an urgent procedure.

1.2 Creditors’ arrangement

The creditors’ arrangement procedure involves the conclusion of a contract between the debtor in financial difficulty and the creditors who hold at least 75% of the accepted and undisputed claims. According to the changes brought by EU Directive no. 2019/1023, the creditors arrangement procedure can also be opened by creditors, and not only by the debtor.

The voting process on the restructuring plan is like the one on the restructuring agreement with the following particularities:

• in order to vote on the restructuring plan, within the same category of claims, one or more subcategories belonging to creditors with common specific interests may be constituted, whose treatment may be different from one subcategory of claims to another.

• in the case of creating sub-categories of claims, the category is considered to have voted for the restructuring plan if the acceptance is achieved by the absolute majority of the value of the claims in that category.

 

After the vote on the restructuring plan, it must be confirmed by the syndic judge, like the restructuring agreement procedure, through a non-contentious procedure.

Also, the closing of the creditors’ arrangement procedure is like that of the restructuring agreement.

1.3.1 Pre insolvency analysis

Any restructuring, judicial or extra judicial, commences with an analysis of the company’s status quo, if the financial distress is temporary or not, and what solutions cand be swiftly and successfully implemented. Practically this in an inherent prior stage of any restructuring or turnaround. Our team has been advising all stakeholders in drawing up sustainable strategies in insolvency scenarios.

1.3.2 Restructuring

Judicial reorganization proceedings imply the drafting, approval, implementation, and observance of a reorganization plan setting forth one or all of the following: the operational and/or financial reorganization of the debtor, the corporate reorganization of the debtor by changing the shareholding structure, and reducing activities by way of disposal of assets from the debtor’s estate, etc.

The reorganization plan may entail either the restructuring of the debtor with the continuation of its activity or, as an alternative, the disposal of certain (or even all) assets from the debtor’s estate, or a combination thereof. Further, the reorganization plan may entail amendments to the debtor’s constitutive act, without the approval of the debtor’s shareholders.

Our team has successfully drafted, proposed and implemented along with the other participants in the insolvency procedures of several reorganization plans Last ones referred to the energy sector and to plastic manufacturing.

Generally, a reorganization plan may be advanced by the following persons: (A) the debtor, with the approval of its sole shareholder or the shareholders‘ meeting (B) the judicial administrator, or (C) one or more creditors holding together more than 20% of the aggregate amount of all payables.

The reorganization plan shall mention the prospects for a recovery in light of the possibilities and the specifics of the debtor’s business, the availability of financial means as well as the market conditions for the debtor’s line of business. The reorganization plan shall also indicate the creditors’ categories, the quantum of their debts, and the payment plan for said debts.

The reorganization plan is subject to approval by the creditors and to confirmation by the syndic judge.

During the confirmation of a reorganization plan and full consummation thereof, the debtor’s estate is managed by the special trustee under the supervision of the judicial administrator.

The reorganization shall be terminated by the court either by allowing the debtor to recommence full commercial activities or ordering the commencement of bankruptcy proceedings (in case of non-performance of the reorganization plan).