Law 85/2014 provides two main types: insolvency proceedings and bankruptcy proceedings.
Insolvency proceedings are aimed at the restructuring and survival of the debtor, while paying the creditors’ receivables to the greatest extent possible. The debtor, judicial administrator or creditor(s) owing at least 20% of the total registered receivables may propose a reorganisation plan in order to restructure and continue the debtor’s activity, or liquidation of some of the assets it owns, or a combination of the two. Reorganisation plans need to contain a payment plan for the registered receivables that may stretch up to 3 years. Plans usually contain reductions of receivables, deferrals of payments and payment in instalments.
If the plan is completed, all historical debt is waived and the proceedings are closed by the syndic judge.
If the debtor fails to observe a reorganisation plan at any moment, any creditor may ask for the debtor to be placed under bankruptcy and for liquidation to begin.
The debtor can also enter bankruptcy directly, provided the debtor does not express the intention to propose a reorganisation plan.
In both cases, any court’s decision, reports/summons issued by the judicial administrator and information on creditors’ meeting decisions must be published in the Official Insolvency Gazette, a public database which ensures that any interested person may find relevant information in connection with any company subject to such proceedings.