Romanian Bankruptcy Law : A Central European Example

Romania now has one of the best-drafted bankruptcy laws in Central and Eastern Europe. The new Romanian bankruptcy law went into effect on August 26, 1995 and replaced the previous bankruptcy provisions in §695-987 of the Romanian Commercial Code, which was translated from the Italian Commercial Code of 1884 and enacted in 1887. While the commercial code fell into disuse during the Communist era, it was never repealed. After the Romanian revolution and the demise of Nicolae Ceauşescu at the end of 1989, the commercial code as well as the civil code remained good law and needed only to be reprinted and applied by the Romanian courts. While these laws needed substantial modernization, at least there was a body of law for the Romanian courts to apply while the legislature was preparing modernization legislation. There are two trial level courts in Romania, the Municipal Court and the Tribunal. In general, the larger and more important cases are filed initially in the Tribunal, and the smaller cases begin in the Municipal Court. All bankruptcy cases begin in the Tribunals. With few exceptions, the Tribunal judges begin their judicial careers in the Municipal Courts and move up after they gain a measure of experience. With these general observations in mind, this article addresses the specific questions raised in the hypothetical posed for this symposium