Branch status in cross-border insolvency procedure

• Author: Cristina Marilena Gheorghe
• Position: Faculty of Business and Administration, University of Bucharest, Bucharest, Romania
• Pages: 64-71

AGORA International Journal of Juridical Sciences, www.juridicalj ournal.univagora.ro

ISSN 1843-570X, E-ISSN 2067-7677

No. 1 (2013), pp. 64-71

64

BRANCH STATUS IN CROSS-BORDER INSOLVENCY PROCEDURE

C. M. Gheorghe

Cristina – Marilena Gheorghe

Faculty of Business and Administration

University of Bucharest, Bucharest, Romania

*Correspondence: Cristina-Marilena Gheorghe,

University of Bucharest, Faculty of Business and Administration,

4 – 12 Regina Elisabeta Blvd., Bucharest, Sector 3, Romania;

E-mail: avocat_cristina_gheorghe@yahoo.com

Abstract

The accelerated development of the legal relations specific to international trade

determined in time the increase of the cases of cross-border insolvency, which determined the

international legislator to try to achieve as possible, considering the procedural rules specific

to every state, a set of standard rules which to be enforced and complied with in the national

legislations regarding the procedure for cross-border insolvency. This way, the legislator was

seeking to unify the international law of insolvency with the purpose of simplifying the

international process in this respect and of obtaining some unitary solutions from this

perspective.

Key words: insolvency, cross-border nature, extraneity item, bankruptcy, creditor,

debtor, judicial reorganization.

Introduction

In all the world states, the legal reality of the bankruptcy’s institution was not and

cannot be challenged; therefore this procedure had a special attention from professionals in

this field. As a result, although the background of the problem is the same – the entrance of

the debtor in ceasing payments - the procedural forms of enforcement are different from one

state to the other.

The first regulations in the field occurred since the ancient time, when there were not

differences between traders and non-traders. Subsequently, in the Middle Age, the procedure

applies only to traders, one of the first regulations in the field being the Ordinance from 1673

given by Louis the XIVth which included provisions regarding "bankruptcies and

insolvencies"

1

. Also France was the one that regulated in a fairly rough manner the situation

of the one being under bankruptcy by means of the Commercial Code established by

Napoleon, giving way to two purposes of this normative document: on one hand ensuring the

payment by the debtor of the receivables due to the creditor and on the other hand recovering

the activity of the in-difficulty trader, purposes which we also find in the current legislation.

This new form of regulation of bankruptcy was conceived as a procedure of collective

execution, being considered “a form of protest against the common law of individual effect”

2

.

The Romanian commercial code from 1887 had as source of inspiration the Italian

commercial code which, on its turn, took over the entire regulation of the French commercial

code. In the content of the Romanian commercial code from 1887, the 3

rd

Book titled “About

1

S. D. Crpenaru, Tratat de drept comercial român, Ediia a III-a revizuit conform no ului Cod Civil,

“Universul Juridic” Publishing House, Bucharest 2012, p. 666 .

2

I. L. Georgescu, Autonomia dreptului commercial, “Revista de drept commercial” Review, no. 4/1993, p. 7,

cited in S. D. Crpenaru, op. cit.