What options does Romanian law provide for restructuring a financially distressed company and avoiding liquidation?

Based on Romanian Insolvency Law (Law 85/2014), the right path usually depends on how close the company is to insolvency and how willing creditors are to accept restructuring conditions. If an agreement with creditors is unlikely, a formal insolvency procedure (with the possibility of judicial reorganization) may be the more realistic route.

In respect to situation of the employees, these procedures do not automatically terminate employment. However, salary claims are treated as a sensitive category in the proceedings (wage claims are typically handled with priority mechanics in the claims process). Any layoffs/redundancies still need to follow applicable labour-law steps.

As for the ongoing contracts, as a general rule, opening an insolvency procedure does not automatically terminate existing contracts. Based on the legal provisions of Law 85/2014, “insolvency-trigger” termination clauses are typically ineffective. During the insolvency procedure, the appointed insolvency practitioner can decide to keep essential contracts or terminate burdensome ones under statutory conditions and timelines.

As for the necessity of hiring a lawyer during these procedures, it is recommended to have a restructuring/insolvency lawyer to (1) choose the best procedure for your company, (2) manage negotiations with creditors, and (3) handle court filings and risk points for management, so you don’t lose leverage early or miss key deadlines.