Tag Held accountable for the company’s insolvency

Tens of thousands of Romanian companies are still in insolvency stage. Many companies opened the insolvency procedure due to the financial crisis and others due to management mistakes. Individuals or companies that must recover loans from an insolvent company must know that sometimes the managers or the administrators of the insolvent companies can be held accountable. If the creditors fill a claim of personality against these persons, they may recover their loans from these people, say attorneys from Pavel, Margarit & Associates, a law firm specialized in company restructuring and insolvency. Thus, according to Law no. 85/2014 regarding the insolvency field, a creditor may claim personality against a person that caused the insolvency of a certain company only once and only during insolvency proceedings. Therefore, a creditor may not formulate a claim for personal liability after the insolvency procedure was closed. Such a claim will be rejected by the Court as inadmissible. According to Law no. 85/2014, the persons to be held accountable for personal liability are the members of the management and/or the members of supervisory bodies of the company, as well as any other persons who has contributed to the debtor's insolvency. The members of the management bodies are the administrators, directors and censors. As the law points out, enumeration is not an exhaustive one. This means that the persons held accountable may also include other functions resulting from the quality of the governing body. As far as censors are concerned, they are the members of a supervisory and control group and do not exercise any management power inside the company. Their powers are limited mainly to overseeing the management decisions, the preparation of financial reporting and keeping the accounting records. Although the censors are not members of any governing body and do not exert any power of leadership in a company, however, the censors of bad faith or the censors honest but negligent may also be held responsible for the insolvency of the company. Also, an audit firm that fulfilled the censors duties may be held responsible for the insolvency of the company. A lawyer specialized in restructuring and insolvency can easily identify the persons responsible for the company's entry into insolvency. A lawyer may also follow legal proceedings for the recovery of the damage. In recent years, Pavel, Margarit & Associates Romanian Law Firm successfully represented in Court both creditors and managers or corporate administrators against which was filled a claim for personal liability. **** Pavel, Margarit & Associates Romanian Law Firm is one of the top law firms in Romania, which offers legal services at the highest quality, beyond clients expectations. The Law Firm approaches the cases with maximum professionalism and dedication. Its ultimate goal is obtaining exceptional results and achieving the clients objectives, in a time efficient manner. Among Pavel, Margarit & Associates clients are top multinationals and local companies. In 2018, the success stories of the Romanian Law Firm have brought recognition of the most prestigious international guides and publications. Thus, Pavel, Margarit & Associates Romanian Law Firm ranked second place in Romania in the rankings of business law firms with the most relevant expertise this year, realised by the Legal 500 publication, the most prestigious guide for law firms in the world, based in London, UK. The law firm is also recognized internationally by IFLR 1000 Financial and Corporate Guide 2018. Pavel, Margarit & Associates Romanian Law Firm is also the only law firm in Romania recommended by the Global Law Experts Director in London in the Dispute Resolution area of Practice. All the relevant information regarding Pavel, Margarit & Associates Romanian Law Firm including areas of practice and the most important deals can be found on the website www.avocatpavel.com, which is one of the most complex law firm websites in Romania.

Who can be held accountable for the company’s insolvency

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