APPROVED FOLLOWING A ROW Playing ping-pong with the law of insolvency

The draft of the Law of Insolvency is at the center of a new political scandal, as it was voted yesterday in the Chamber of Deputies, despite the fact that the PNL and the PDL voted against it.

Last year, this legislative draft was promoted through an Emergency Ordinance, after it was declared unconstitutional, following the notification made by the Ombudsman.

The PNL and the PDL oppose the new law, and have announced that they would file a challenge with the Constitutional Court.

The representatives of the National Liberal Party have announced, in a press release, that the request of the liberal deputies for the legislative draft to be sent back to the Commission for legislation, discipline and MP immunity was rejected by the majority of the deputies.

The MPs of the PNL claim that the new should have also included provisions concerning the insolvency of individuals, as this procedure represents "an element that is important and necessary for the Romanian economy".

"The National Liberal Party considers that through the passing of the Law on procedures for insolvency and its prevention without the inclusion of the provisions concerning individuals, perpetuates a double standard which liberals will continue to fight against", the representatives of the PNL state.

They are also emphasizing the fact that the law violates the citizens' right to legal defense, "as Romanians are required to pay a fee to the Bulletin of Insolvency Proceedings in order to find out whether they are involved in a legal proceeding and to dispute in court the possible court rulings which they consider meritless".

Simona Miloş, the president of the National Institute for the Training of Insolvency Practitioners (INPPI), considers that yesterday's vote was political, because the MPs of the PNL have participated in the talks concerning the Law of insolvency.

The representatives of the PDL, PNL and PPDD have criticized the haste which the law was passed in by the Chamber of Deputies, whereas Mrs. Miloş considers that the proceeding was normal, and work on it happened at a quick pace.

The deputies of the PDL did not vote on the draft law, leaving the room during yesterday's debates. The Minister of Justice, Robert Cazanciuc, said that the draft law submitted for approval "is in fact proposing an Insolvency Code", by compiling all the regulations that govern the insolvency mechanism aimed at managers.

He said that the goals of the draft law are to improve the legislative framework and the effectiveness of the insolvency procedure, and that the initiative was "an important step forward" in supporting the business sector and proposing solutions for preventing abuse.

Prime-minister Victor Ponta considers that the new Law of Insolvency must allow companies to undergo restructuring and pay off their debts in order to achieve a turnaround, but also to deal with "the clever boys who have realized that it is better to buy TV stations and politicians than to pay taxes".

• Simona Miloş: "The new law of insolvency is balanced"

The new law of insolvency is balanced, says Simona Miloş, who told us that the Ministry of Public Finance (MFP) has only made amendments to the project on Monday night, with most of them being rejected.

One of the proposals of the Ministry of Public Finance among those that were approved concerns the settlement of the receivables booked after filing for insolvency.

According to the president of the INPPI, the provision which concerned foreclosure during the procedure was rejected. Also the reorganization period during insolvency has been kept at three years, with the option for an extension of one more year.

Mrs. Miloş expressed her unhappiness at the fact that the debts to the state budget by insolvent companies still have priority in the law, unlike in other developed countries.

The new law stipulates that the companies that accumulate receivables in a company after it becomes insolvent can request for it to be declared bankrupt, upon 60 days from the moment of the taking of a measure by the administrator, or, in the event of a dispute, within 60 days from the ruling of the bankruptcy. Utility suppliers will be allowed to request for the insolvent company to be declared bankrupt within 90 days from the dates mentioned above, as the case may be. This provision was another one that liberals have disagreed with.

Concerning the regulation of the insolvency of individuals, lawyer Gheorghe Piperea, Economics PhD, who has initiated a draft law on insolvency in 2010, considers that the Law of insolvency and the Law of individual insolvency, are "two projects that work at different speeds", and he says that holding back an initiative which regulates the insolvency of companies in order to have it include a project which concerns personal insolvency would be a mistake in terms of legislative policy.

In the Parliament there are currently several initiatives on the topic of personal insolvency, and Gheorghe Piperea stressed that even though liberals are requesting for the new law to include provisions concerning the insolvency of individuals as well, they weren't too eager to support such a project lately.