New Insolvency Code gets green light from Romanian Parliament. What's new?

Romania's new Insolvency Code, which was adopted on Tuesday (April 15), in the Parliament, allows for judiciary re-administration plans to be more easily accepted from now on in Romania. It also moves the focus from a company's total debt value and debt per creditor, to the number of creditors. This way, creditors which hold a smaller debt package in an insolvent company have a bigger say in the re-organization vote. According to pundits, large creditors are at disadvantage, and sometimes even the state, as the Tax Administration ANAF is in many cases a large debtor to companies under re-organization. The ANAF however says the new Code is "a step forward in satisfying the borrowers’ desire, as means of their economic reintegration, as well as a more efficient tool for ANAF, for the collection of budgetary debts,” reads its statement. Prime Minister Ponta said the new law prevents the 'smart guys' from buying TV stations and bribing politicians while doing tax evasion. Under the new law, the individuals who are responsible for the insolvency can be punished, including with the impossibility to become company administrators for 10 years. It will also be possible for creditors to ask for a company's insolvency 60 days after a debt is due, up from 30 days previously. The threshold of the debt is of RON 40,000, both in case the debtor wants to declare insolvency, and for the creditor. For employees who are not paid their salaries, the threshold for asking insolvency of the first is six unpaid salaries. The value of a salary taken into account here is the gross average salary per economy. The Chamber of Deputies adopted on April 15 the new Insolvency Code, with 212 votes ‘in favor’, 111 votes ‘against’ and eight abstentions. The National Liberal Party PNL and the Liberal Democratic Party PDL announced they will attack the draft bill at the Constitutional Court.