Insolvency. Confirmation of the reorganization plan. Limits of assessing the sustainability of the plan

DREPTUL CONTENCIOSULUI ADMINISTRATIV ŞI FISCAL

Abstract

The syndic judge shall not be limited to the check of the lawfulness conditions which the plan should fulfil. The confirmation of the plan approved by creditors involves a comprehensive analysis, both of the conditions imposed under Article 139 of Law no. 85/2014, regarding the method of acceptance of the plan on the part of creditors, and of the actual opportunities of performance of the obligations assumed under the plan, in relation to the resources that the debtor company may acquire. Hence, besides the conditions of voting on the reorganization plan, by the meeting of creditors, provided for under Article 139 para. (1) letters A-E and para. (2) of Law no. 85/2014, to be confirmed that the plan must comply „in terms of lawfulness and sustainability, with the provisions of Article 133”, as laid down in Article 139 para. (1) letter E of Law no. 85/2014. Thus, the condition of sustainability of the reorganization plan is a basic condition required to be verified by the syndic judge upon confirmation of the reorganization plan, who may also request the opinion of an expert as regards the possibility of the implementation of the plan (Article 139 para. (1) of Law no. 85/2014). It is only natural for this to happen, since the purpose set forth in Article 2 of Law no. 85/2014 is, first, to establish a collective procedure to cover the debtor’s liability, and only alternatively, if appropriate, to give an opportunity of recovery of the debtor’s activity. The confirmation of an unsustainable reorganization plan, namely without any chance of success, shall only decrease the extent to which assets are capitalized and debts are recovered and incur unnecessary costs of procedure. The reorganization plan of the activity should demonstrate a high level of confidence that its implementation will restore the long-term sustainability of the debtor. This demonstration should be based on credible assumptions, be accompanied by an analysis based on scenarios and on adequate and concrete performance indicators which capture the specificity of the debtor’s activity.