Executive summary

Romanian insolvency law provides a special regime for the insolvency of groups of companies. It coordinates proceedings concerning group members through separate cases, cooperation arrangements, the possible appointment of a common insolvency practitioner and substantive rules such as the subordination of intra-group claims. Cross-border coordination may also use EU instruments, particularly Regulation (EU) 2015/848. Practical application raises procedural and timing issues on which courts have reached different conclusions.

The Romanian framework: Articles 183–203 of Law No 85/2014

The Act contains a chapter specifically addressing group insolvency. Its principal mechanisms concern:

  • the definition of a group of companies;
  • a joint application to open proceedings for two or more group members;
  • the special rules determining the competent tribunal;
  • separate case files for each member, combined with allocation arrangements and cooperation duties;
  • appointment of the same judicial administrator or consortium where the common-creditor condition is met;
  • a cooperation protocol approved by the insolvency judge;
  • substantive consequences for intra-group claims and special time limits for submitting reorganisation plans.

Essential features:

  • A group is identified by the relevant control relationships and qualifying shareholdings. Joint applications may concern several insolvent members and, where the statutory requirements are met, members which are not yet insolvent (Articles 192–196).
  • Proceedings remain separate for each company. The rules allow coordination through the same insolvency judge and practitioner, or a consortium of practitioners. Judicial administrators must cooperate, including through a protocol filed in the proceedings and approved by the judge (Articles 185–191).
  • Article 201 addresses claims held by one group member against another which arose before proceedings opened. It excludes ranking under Article 161 points 8 or 9 and provides for their entry at the rank specified in point 10(a). The nature of the claim, any security and the applicable distribution rules must be examined before drawing conclusions about actual recovery.

What EU law adds

Regulation (EU) 2015/848 provides a framework for cross-border insolvency within its scope: jurisdiction, recognition of decisions opening proceedings, and cooperation between courts and insolvency practitioners. Its group provisions support communication and cooperation between practitioners and courts dealing with different members of the same group.

Where the relevant conditions are satisfied, group coordination proceedings and the appointment of a coordinator may help organise the process. Cross-border protocols and other cooperation arrangements can also support coordinated reorganisation and reduce fragmentation where group companies are involved in proceedings in several EU jurisdictions.

Why these rules matter in practice

  • Separate companies and estates: group proceedings do not automatically pool the members’ assets or merge their legal personalities. Each company retains its own estate. Cooperation and the rules governing intra-group claims nevertheless allow the group’s difficulties to be addressed in a coordinated way.
  • Intra-group claims: the ranking rule in Article 201 can materially affect a group creditor’s prospects of recovery. It should not be treated as a statement that every intra-group relationship or security right has the same outcome. The particular claim and the procedural circumstances must be assessed.
  • Cooperation: the practitioners’ duty, including the cooperation protocol, aims to avoid inconsistent decisions which diminish economic value and to support coordinated reorganisation or realisation of assets. Cooperation can be difficult where creditors’ interests diverge or individual proceedings are already advanced.

Procedural difficulties and differing approaches in case law

Application of the group regime can depend on procedural stages and deadlines. The professional commentary cited below describes differing approaches taken by the Bucharest Court of Appeal in cases from 2016 and 2021.

According to that analysis, one decision accepted the application of group-insolvency consequences after final schedules of claims had been published and ordered the subordination of intra-group claims. Another refused the request because it was made after the time for challenging the preliminary schedule had expired, also taking account of the consequences of changing the ranking at that stage.

Those examples should be read in their factual and procedural context. They do not establish that the same outcome applies in every case or that subsequent case law has resolved every issue. The question of when the group regime and its consequences may be invoked requires examination of the current legislation, the relevant decisions and the actual stage of the proceedings.

Practical implications include:

  • the timing of a request may affect the schedule of claims and group creditors’ rights;
  • a creditor who fails to use the appropriate procedural remedy in time may lose an opportunity to contest the treatment of its claim;
  • independent creditors may seek the application of the intra-group ranking rules, with significant economic consequences.

General practical steps

  1. Identify and document the group. Prepare the list of members, an explanation of how the group operates and the relevant intra-group contracts. The documents required for a joint application help establish the group relationship and the basis for coordinated proceedings (Article 194).
  2. Determine jurisdiction and the form of the application. Examine the special rules concerning the parent company or the member with the highest turnover, as applicable, and the allocation of separate files (Article 185).
  3. Appoint practitioners and agree cooperation. Assess whether the statutory common-creditor condition requires the same judicial administrator or consortium. Where separate practitioners are appointed, their cooperation duties and the protocol must be addressed promptly (Articles 188–189).
  4. Check claims and deadlines. Preliminary and final schedules are prepared in each member’s proceedings. A proposed change to the ranking of intra-group claims may require a particular procedural remedy. The timing issues discussed in the cited case-law commentary make early review essential.
  5. Coordinate reorganisation plans. A practitioner appointed for one member may propose a plan in another member’s proceedings. The special provisions on filing periods and sharing information are intended to support compatible, coordinated plans (Articles 190 and 199–200).
  6. Assess the cross-border dimension. Where different EU jurisdictions are involved, consider the cooperation and coordination mechanisms available under Regulation 2015/848, including whether group coordination proceedings or cross-border arrangements are appropriate.

Risks and consequences for the parties

  • Intra-group creditors: the ranking of pre-opening claims may substantially reduce recovery. Effective procedural protection depends on identifying the appropriate remedy and acting within the applicable time limit.
  • External creditors: coordination may preserve asset value and improve the prospects of reorganisation. They should monitor the cooperation arrangements and whether proposed plans adequately protect their rights.
  • Judicial administrators and liquidators: cooperation duties must be taken seriously. Complex coordination may create conflicts of interest and practical questions about costs, information sharing and the treatment of assets.
  • Debtor companies: coordination can facilitate a group-level response to financial distress, but intra-group loans, guarantees and transfers require separate legal analysis. Their effects cannot be assumed merely because the parties belong to the same group.

Practical conclusions

Law No 85/2014 provides mechanisms for coordinating group insolvency: joint applications, separate proceedings, cooperation duties, rules on intra-group claims and compatible reorganisation plans. Regulation (EU) 2015/848 complements the national framework in cross-border cases within its scope.

The procedural route and timing remain important, especially where the treatment of claims is challenged after schedules have been prepared. Differences in the reported case law reinforce the need for timely action and a strategy based on the particular proceedings.

A case-specific assessment should address, at least:

  • the group structure and the documents required under Article 194;
  • the timing and form of court applications, including any necessary challenge to a schedule of claims;
  • a clear cooperation protocol covering responsibilities, information exchange and costs;
  • the availability of EU coordination mechanisms where appropriate;
  • relevant current case law on procedural limits and the application of Article 201.

Selected sources

Method and limitations

This is a general explanation based on the legislation and commentary identified above. It is not an assessment of a particular case. Applying the rules requires examination of the documents, facts and procedural position. Relevant developments may include decisions of the High Court of Cassation and Justice, the appellate courts’ treatment of deadlines for challenging schedules of claims, and EU case law on cross-border coordination.