Ovidius University Annals: Economic Sciences Series (Sep 2022)
Early Warning Tools For Insolvency Prevention: Implementation in the Romanian Legal Framework
Abstract
On the 17th of July 2022, the Law no. 216/2022 for the amendment and completion of the Law no. 85/2014 regarding insolvency prevention and insolvency proceedings and other normative acts has entered into force. Therefore, the Law no. 85/2014, which regulates pre-insolvency and insolvency proceedings, meets the requirements of the Directive (EU) 2019/1023 of the European Parliament and of the Council of 20 June 2019 on preventive restructuring frameworks, on discharge of debt and disqualifications, and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive (EU) 2017/1132 (Directive on restructuring and insolvency), the latter entering into force on the 10th of July 2019. The Directive is focused on three main objectives: (1) the availability of preventive restructuring frameworks, (2) offering a second chance for honest entrepreneurs, and (3) regulating measures to increase the efficiency of restructuring, insolvency and discharge proceeding. The focus of this paper is represented by an analysis of early warning tools regulated in Romania, which are meant to be used for identifying financial difficulties faced by viable enterprises, in order to avoid its unnecessary liquidation by adopting safeguard measures. The development of early warning tools is part of the Directive’s first objective, being closely related to accessing safeguard proceedings.
