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Recognition of foreign proceedings
Under what circumstances will the courts in your jurisdiction recognise the validity of foreign insolvency proceedings?
Foreign insolvency proceedings are generally recognised in Romania subject to the fulfilment of certain formalities and submission of the relevant documents. The enforcement of a foreign insolvency procedure may be rejected by the Romanian courts if the foreign procedure:
- is the result of fraud; or
- breaches certain norms of public order under Romanian private international law.
Winding up foreign companies
What is the extent of the courts’ powers to order the winding up of foreign companies doing business in your jurisdiction?
The Romanian courts have the prerogative to open and oversee the Romanian insolvency procedure of a foreign company that is doing business in Romania through a subsidiary (without legal personality but registered in Romania for fiscal purposes).
Centre of main interests
How is the centre of main interests determined in your jurisdiction?
The European Court of Justice (ECJ) has given new guidance on the strength of the registered office, the presumption of the centre of main interests and the meaning of ‘establishment’ for the purpose of the EU Insolvency Regulation.
The centre of main interests must be interpreted in a uniform way by EU member states and by reference to EU law rather than national law, as follows:
- If a debtor's registered office is moved before the request to open insolvency proceedings is filed, the debtor's centre of main interests is presumed to be the place of its new registered office. The ECJ has stated that the centre of main interest is established by looking to the last location of the debtor’s registered office.
- A debtor's centre of main interests must be determined by attaching greater importance to the place of the company's central administration, as may be established by objective factors which are ascertainable by third parties (eg, the presence of assets belonging to the debtor and the existence of contracts for financial exploitation of those assets in an EU member state other than that in which the registered office is situated).
- Factors to be taken into account when analysing whether the registered office presumption has been rebutted include all places where the debtor company pursues economic activities and all those in which it holds assets, insofar as those places are ascertainable by third parties.
- The requirement that the factors used to rebut the registered office presumption must be objectively ascertainable by third parties may be considered to be met where the material factors have been made public, or at the very least, made sufficiently accessible to enable third parties (in particular, the company's creditors) to be aware of them.
What is the general approach of the courts in your jurisdiction to cooperating with foreign courts in managing cross-border insolvencies?
The Romanian courts will generally cooperate with foreign courts and representatives. The courts are also empowered to communicate directly or request information or assistance from foreign courts or representatives.
Cooperation may be implemented by any means appropriate, such as:
- designating a person or entity acting under the instructions of the court;
- communicating information by any means considered appropriate by the court;
- coordinating the administration and supervision of the debtor’s assets and activity;
- approving or implementing courts’ coordination arrangements; and
- coordinating simultaneous insolvency proceedings regarding the same debtor.
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