Increased accountability for managers could lead to wave of insolvencies and resignations

The Romanian Government wants to pass an emergency ordinance in order to force company managers to file for insolvency within 30 days from the time insolvency sets in. What consequences could this measure have? New cases of insolvency after an 88% rise in the number of companies that started insolvency proceedings in the first three months of the year.
One of the ways in which the Ministry of Finance intends to combat fiscal evasion is by holding to account company managers who fail to file for insolvency in due course, seeking to “boost the level of budget tax collection,” but lawyers and insolvency experts believe such a step could have serious side effects.
“The adoption of the draft emergency ordinance in the form published by the Ministry of Public Finance could significantly affect the functioning of trading companies late in paying their dues to the state, and lead to a wave of insolvencies, resignations of legal representatives and, potentially, the appointment in managing positions of people who neither hold goods nor derive incomes that could be seized by the fiscal authorities,” says Ana-Maria Placintescu, insolvency practitioner and partner of Musat & Asociatii law firm.