The number of bankruptcies in the Romanian economy doubled in 2005 compared with the previous year, with about 10,000 of the 11,000 companies for which insolvency procedures were started going bankrupt, the National Union of Reorganisation and Liquidation Practitioners (UNPRL) says. Out of the insolvent companies, 12% began receivership procedures and 10-12% of them managed to save themselves by reorganisation. "The number of bankruptcies almost doubled. Yet compared with the total number of active trading companies, several hundred thousand, this is an extremely low number if looking at the situation in the European Union countries," lawyer Arin Stanescu, UNPRL chairman specified. The increase in the number of bankruptcies last year was also influenced by the reduction of the debt for which one can file for bankruptcy from 5,000 euros to 3,000 euros. The new Insolvency Law, 85/2006 will come into force on July 21 and is expected to help the market get rid of the companies existing "in name only" faster, the UNPRL chairman says. One of the new things introduced by this law is a special procedure called simplified procedure that has bankruptcy procedures start in no more than two months if all conditions set by the law are met. Stanescu says such conditions include the case when incorporation documents or balance sheets cannot be found or are not produced by the debtors, the headquarters no longer exists or is not the same as registered with the Trade Registry or the managers are nowhere to be found.
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