The company has debts, but the business is viable: what options exist before insolvency?

The first step is to establish the company's real situation. A late payment should not automatically be classed as insolvency, but nor should it be treated as a mere incident if the lack of liquidity has become persistent.

The essential distinction lies between a threat to the company's future ability to pay, in the case of financial difficulty, and insufficient available funds to pay debts that are certain, liquid and due, in the case of insolvency. The law establishes a rebuttable presumption of insolvency where a debt remains unpaid 60 days after its due date. Being rebuttable, the presumption can be overturned; the period should not, however, be read as a window during which insolvency is impossible.

The analysis must therefore set the debts that have fallen due against the funds actually available, foreseeable receipts and accessible financing. A profitable contract with distant or uncertain receipts does not necessarily settle the obligations that are due today.

Article 6 of Law no. 85/2014 requires a report by an insolvency practitioner explaining the nature of the difficulty, its causes and effects, and the need for recovery measures. The text also requires a documented analysis showing that the debtor is not insolvent. This diagnosis cannot be replaced by the director's assurance that the company "will bounce back".

If the difficulty concerns a small number of creditors who are willing to cooperate, direct negotiation can allow due dates to be adjusted, payments to be made in instalments or other contractual terms to be amended. This can be a less formal solution than a preventive procedure.

For the negotiation to be useful, the proposal must be backed by a credible schedule of receipts and payments. From a contractual perspective, the agreement should make clear what happens to penalties, guarantees, any enforcement proceedings and the consequences of missing an instalment.

The limit of this solution is that starting the discussions does not, in itself, provide any collective protection. One supplier's cooperation does not secure the cooperation of the others. If a creditor can halt the business through enforcement, bilateral negotiation must be assessed against the risk that the other creditors pose to the recovery.

The restructuring agreement governed by Law no. 85/2014 is not simply a commercial arrangement given that name. It involves an insolvency practitioner, the design of restructuring measures, negotiation with and a vote by the relevant creditors, and completion of the statutory confirmation mechanism. The negotiations take place largely out of court.

An important element is the distinction between affected and unaffected claims. The restructuring may modify certain claims, while others remain outside those changes. Excluding a claim does not, however, make the debt disappear: its payment must be built into the company's financial projections.

The agreement may be appropriate where there is a reasonable prospect of negotiation and the company can continue trading during the discussions. It should not be mistaken for a mechanism that automatically stays all enforcement proceedings from the moment negotiations begin.

The preventive composition (concordat preventiv) involves opening court proceedings, the participation of a composition administrator (administrator concordatar) and the drawing up of a restructuring plan, which is negotiated, voted on and submitted for court confirmation.

One of the relevant differences from the restructuring agreement is the existence of statutory mechanisms for staying enforcement proceedings. These can provide the breathing space needed for negotiation, but their effects depend on the stage of the procedure, the nature of the claim and the conditions laid down by law. Employee wage claims are treated differently, and the protection should not be described as unlimited or permanent.

A stay of enforcement is not, in itself, a recovery. It does not automatically bring in customers, reduce costs or secure financing for the business. The usefulness of the preventive composition depends on what the company can achieve during the period of protection.

The debtor also retains the right to manage its business, under the ordinary rules of law, for the duration of the preventive procedures. The individual and collective rights of employees, including their rights to information and consultation, are not set aside by entering into restructuring.

If the main pressure comes from tax liabilities, the available payment facilities and their conditions must be examined. A tax instalment plan is not, however, a restructuring of the whole company: it does not, by itself, change the obligations owed to the bank, suppliers or other creditors.

Compatibility with preventive procedures also matters. The guidance issued by the National Agency for Fiscal Administration (ANAF) on the amendments made by Law no. 170/2026 points to restrictions on granting and maintaining instalment plans for debtors in insolvency prevention procedures. Tax instalment plans and the preventive composition should therefore not be presented as solutions that can run side by side without first checking the conditions and the order in which the steps are taken.

The same guidance sets out specific rules for tax liabilities included in agreements or plans, the order in which they are discharged and the cancellation of reduced claims. For a company with significant debts to the state budget, the tax component must be built into the financial plan, not dealt with after the negotiations with the other creditors.

Restructuring is not just a request for later due dates. The plan must link the financial measures to the operational ones: correcting costs, recovering receivables, adapting contracts and identifying the financing needed to keep the business going. Simplifying the debt without addressing the causes of the difficulty may only postpone the problem.

For creditors, the central question is whether the restructuring offers a better recovery than the available alternative. The legal framework aims at fair treatment and at basing the measures on a comparison with the next-best alternative, not at giving the debtor an unjustified advantage.

For example, in a hypothetical scenario, a company with a profitable business may need its due dates adjusted because it gets paid later than it has to pay. If, however, every month produces losses and there are no credible corrective measures, merely postponing the debts does not demonstrate viability.

Article 6 of Law no. 85/2014 excludes insolvent debtors from preventive procedures. Prospects of recovery do not remove this condition of access. A business may have potential and still require consideration of a reorganisation within insolvency proceedings rather than a preventive composition.

Insolvency and bankruptcy should not be confused: where possible, the law allows the business to be turned around within insolvency proceedings. What matters is choosing the mechanism that fits the real situation, not avoiding a label considered unfavourable.

For a viable company, early restructuring can turn pressure from creditors into a sustainable payment schedule. The choice between direct negotiation, the restructuring agreement, the preventive composition and tax facilities depends, however, on liquidity, the structure of the debts, the risk of enforcement and the actual capacity to recover.

The decisive question is not "how long can we postpone payment?" but "what changes during that time so that the company can meet its obligations?". Without a documented answer, the extra time may simply mean accumulating new debts.

This article is of a general nature. The eligibility for and effects of each procedure must be assessed in light of the company's situation and the rules applicable at the time the step is taken; for procedures already under way, transitional rules may call for a separate analysis.