Contributed by Dolea & Co.
1.1. What domestic pieces of legislation and international instruments apply to restructuring and insolvency matters in your jurisdiction?
The following pieces of legislation apply to restructuring and insolvency matters:
- Insolvency Law no. 149 of June 29, 2012 (Law no. 149/2012);
- Law on the activity of banks no. 202 of October 6, 2017 (Law no. 202/2017);
- Law on the liquidation of banks no. 550 of July 21, 1995 (Law no. 550/1995);
- Code of Civil Procedure no. 225 of May 30, 2003;
- Civil Code no. 1107 of June 6, 2002.
1.2. Do you have a well-established legal regime governing restructuring and insolvency, or do you have rather frequent legislative changes in the area?
The legislation of the Republic of Moldova regarding insolvency procedures is at the fourth stage of development. During 31 years of independence, the Republic of Moldova already has the fourth law in the field: Law no. 851/1992 on bankruptcy, Law no. 786/1996 on bankruptcy, Insolvency Law no. 632/2001, and Insolvency Law no. 149/2012. In 2020, by Law no. 141/2020, a series of amendments were introduced to Insolvency Law no. 149/2012. The multitude of changes to the legal framework in this segment shows that there are still gaps in the field of insolvency legislation.
1.3. Are there any special regimes applying to specific sectors?
Law no. 149/2012 governs in separate chapters:
- Some particularities of insolvency in agriculture (chapter VIII)
- The particularities of the insolvency of the peasant (farmer) household (chapter IX)
- The particularities of the insolvency of insurance companies (chapter X)
- The particularities of the insolvency of persons licensed or insured on the capital market (chapter XI)
- The particularities of the insolvency of savings and loan associations (chapter XII)
Law no. 149/2012 does not apply to banks. In this case, Law no. 202/2017 and Law no. 550/1995 are relevant.
1.4. Were any changes to restructuring or insolvency laws adopted in response to the COVID-19 pandemic? If so, what were they?
We are not aware of changes to restructuring or insolvency law adopted particularly in response to the COVID-19 pandemic.
1.5. Are there any proposed or upcoming changes to the restructuring insolvency regime in your country?
There are no proposed or upcoming major changes to the restructuring insolvency regime in the Republic of Moldova. The Moldovan legislator, however, implements periodically minor changes to the law. For instance, the last change took place in July 2022 when the legislator amended Art. 67 of Law no. 149/2012 with respect to the supervision of the insolvency administrator/liquidator by the insolvency court.
1.6. Has your country adopted or is your country considering the adoption of the UNCITRAL Model Law on Enterprise Group Insolvency?
Moldova has not adopted yet the UNCITRAL Model Law on Enterprise Group Insolvency, although discussions about its adoption have been taking place for a while.
2.1. Is there an insolvency test that triggers certain obligations for directors or officers of the debtor company? If so, what is the test and what are the consequences for failure to meet these obligations?
Art. 14 of Law no. 149/2012 on insolvency governs the obligation of the debtor company to file the introductory request. Therefore, the debtor is obliged to file an introductory request if there is one of the grounds provided for in Art. 10 of Law no. 149/2012 on insolvency (inability to pay or over-indebtedness of the debtor). Also, the debtor company has the obligation to file the introductory request if: a) the full execution of the due claims of one or more creditors may cause the impossibility of the full satisfaction of the claims of the other creditors; and b) during the liquidation, which is carried out according to other laws, it becomes obvious that the debtor cannot fully satisfy the creditors’ claims. The debtor is obliged to file an introductory request immediately, but no later than the expiration of 30 days from the date of occurrence of the grounds indicated above. If the debtor does not file an introductory request in the cases and within the term provided above, the person who has the right to represent the debtor, the shareholders with unlimited liability, and the debtor’s liquidators are subsidiarily liable to the creditors for the obligations arising after the expiration the 30-day period. These persons bear administrative liability in accordance with the law.
2.2. What types of insolvency procedures are established by law in your jurisdiction?
Law no. 149/2012 on insolvency governs the following insolvency procedures:
1. The insolvency procedure, through which the debtor enters, after an observation period, into:
a) restructuring procedure
b) bankruptcy procedure
2. Simplified bankruptcy procedure
3. Accelerated restructuring procedure (it is considered a pre-insolvency procedure)
2.3. Who has the right to initiate insolvency proceedings?
As a general matter and in principle, the introductory request may be filed by the debtor company or by its creditors. The executive body, the person who has the right to represent the debtor, shareholders with unlimited liability, and the debtor’s liquidators, have the right to file an introductory request on behalf of the debtor.
2.4. What are the consequences of commencing insolvency proceedings, in particular:
2.4.1. Does management continue to operate the business and/or is the debtor subject to supervision?
Chapter III of Law no. 149/2012 on insolvency governs the effects of the initiation of the insolvency procedure. From the moment the insolvency procedure is initiated, the activity of the debtor’s management bodies is suspended.
By the decision to initiate insolvency proceedings, the debtor’s right to administer and dispose of the assets included in the debtor’s estate is transferred to the insolvency administrator/liquidator. Any act of disposal by the debtor over an asset from the debtor’s estate made after the initiation of the insolvency procedure is null and void. By the decision to initiate insolvency proceedings, the insolvency court orders the banks where the debtor has available accounts not to use them without an order from the insolvency administrator/liquidator. Violation of court orders involves the liability of the banks for the caused damage, as well as a judicial fine of 10% of the operated amount in the respective account(s).
2.4.2. Does a moratorium or stay apply and if so, can it have an extraterritorial effect?
In accordance with Art. 81 of Law no. 149/2012, another effect of the initiation of the insolvency procedure is the establishment of a moratorium on the enforcement of claims. The execution of the debtor’s obligations not based on an act of the insolvency administrator/liquidator is prohibited for 180 days from the date of initiation of the insolvency procedure or the simplified bankruptcy procedure. For unsecured creditors, it is prohibited to individually enforce the debtor’s amount during the entire insolvency process.
According to paragraph 3 of Art. 81 of Law no. 149/2012, for secured creditors, the ban on the capitalization of goods encumbered with guarantees is valid for 180 days from the date of initiation of the insolvency procedure, unless the debtor enters bankruptcy, in which case the ban on capitalization ends on the day the court issues the order regarding the initiation of bankruptcy proceedings. In case the procedure of restructuring of the debtor is initiated, the ban on forced execution of goods encumbered with guarantees is extended for the period of the moratorium.
According to paragraph 4 of Art. 81 of Law no. 149/2012, secured creditors are entitled to proceed with the compulsory pursuit of goods encumbered with guarantees before the expiration of the 180-day period only on the basis of a decision of the insolvency court, issued at the request of the secured creditor in the following cases:
a) the creditor proves that it suffers losses by reducing the value of the asset encumbered with a guarantee (including in the case of perishable assets) and that there is no real possibility of compensating the loss of the value of the asset in the insolvency procedure;
b) the encumbered asset is not essential for the successful restructuring of the debtor or for the sale of the debtor’s business; or
c) the debtor’s restructuring procedure plan was not confirmed
2.4.3. How does it impact the existing contracts (e.g., is the counter-party free to terminate them, can the debtor’s pre-insolvency transactions be challenged)?
In accordance with Art. 89 of Law no. 149/2012, if, at the time of initiation of insolvency proceedings, a bilateral contract is not fully executed by the debtor or by the other party, the administrator/liquidator is entitled to execute it instead of the debtor or to ask the other party to execute it when they consider that the execution is in the interest of the debtor mass. If the debtor fails to fulfill its obligations under the contract that the administrator/liquidator intends to enforce, the breach must be remedied and the other party must be reinstated in the position prior to the breach
In accordance with Art. 91 of Law no. 149/2012, rental or lease agreements where the debtor is a tenant or lessee can be terminated by the administrator/liquidator without taking into account the term for which they were concluded.. If the administrator/liquidator disposes of immovable property that the debtor was leasing, and the acquirer takes the place of the debtor in the lease relationship, the acquirer may terminate the lease agreements taking into account the legal term of termination.
Further, no public utility service provider that holds a dominant position (supply of electricity, natural gas, water, telephone services) has the right to unilaterally refuse or interrupt the provision of such services to the debtor from the moment of submitting the introductory request, even if the debtor has not paid for the services rendered prior to the submission of the introductory request. If insolvency proceedings, bankruptcy proceedings, or restructuring proceedings are initiated, the costs of current services are paid monthly based on the contracts concluded by the supplier with the administrator/liquidator. The reduction or interruption of the provision of the mentioned services can only take place if the administrator/liquidator or the debtor does not pay, according to the contract, the current services provided after the initiation of the legal process.
Also, in accordance with Art.104 of Law no. 149/2012, after the initiation of the insolvency procedure, the administrator/liquidator or any creditor with a legitimate interest, with the consent of the administrator/liquidator, may file legal claims (including counterclaims) in the insolvency court with the purpose to cancel the following legal acts:
a) any legal act concluded by the debtor in the last two years preceding the submission of the introductory request with the intention of preventing, delaying, or complicating the possibility of extinguishing creditors’ claims, which affected the rights of creditors;
b) transfers of goods or the assumption of obligations free of charge by the debtor, made in the last two years preceding the submission of the introductory request, with the exception of the assumption of moral obligations or acts for the public good (sponsorship) in which the generosity of the donor is proportional to its assets;
c) the transfers of goods or undertakings of obligations by the debtor, made in the last two years prior to the submission of the introductory request, in which the benefit of the debtor is clearly greater than the one received;
d) the transfers of goods from the debtor to a creditor, performed in the last six months preceding the submission of the introductory request, which had the effect of increasing the amount that the creditor would receive in the event of the debtor’s liquidation;
e) the transfers of goods from the debtor to a creditor, carried out in the last six months preceding the submission of the introductory request, to which the creditor was not entitled or which were made in order to settle a debt that had not reached maturity;
f) the free granting of a pledge or a mortgage, any other guarantee for a claim that was unsecured in the last six months preceding the submission of the introductory request or for a claim of a shareholder of the debtor;
g) any documents concluded and guarantees granted by the debtor after the submission of the introductory request.
2.5. Which steps do insolvency proceedings normally include and what are the roles of the courts and other key stakeholders (such as debtor, directors of the debtor, shareholders of the debtor, secured creditors, unsecured creditors, etc.)?
The stages of the insolvency process can be divided into the following:
a) introducing the introductory request for initiation of the insolvency process;
b) accepting the introductory request and putting the debtor under observation;
c) adjudication of the introductory request with the issuance of one of the following solutions:
- ascertaining the insolvency of the debtor and initiation of the insolvency process;
- establishing the insolvency of the debtor and initiation of the simplified bankruptcy procedure;
- rejection of the introductory request and refusal to initiate an insolvency process.
d) challenging the debtor’s legal documents;
e) the capitalization of the debtor assets and the satisfaction of creditors’ claims;
f) termination of the insolvency process.
The insolvency court’s competencies are:
- the reasoned pronouncement of the decision to initiate the insolvency process and, as the case may be, to enter into insolvency both through the bankruptcy procedure and through the debtor’s restructuring procedure;
- examining the debtor’s objections against the creditors’ introductory request and judging the creditors’ objections against the initiation of the procedure;
- the appointment of the provisional administrator and the fixing of his remuneration, the appointment of the insolvency administrator or, as the case may be, the liquidator to administer the procedure until his confirmation or, as the case may be, until his replacement by the meeting of creditors, as well as the establishment of his duties for this period;
- dismissal or acceptance of the request for resignation of the insolvency administrator/liquidator;
- lifting the debtor’s right to continue his activity;
- holding accountable the members of the management bodies who contributed to the insolvency of the debtor, as well as notifying the criminal investigation bodies in relation to the reprehensible acts committed by them;
- judging the actions brought by the insolvency administrator/liquidator regarding the nullity of the legal documents concluded by the debtor prior to the filing of the lawsuit;
- resolving the appeals of the debtor, the creditors’ committee, or any interested person against the measures taken by the provisional administrator, the insolvency administrator/liquidator;
- confirmation of the plan of the restructuring procedure or, as the case may be, liquidation after its voting by the creditors;
- settlement of the request submitted by the insolvency administrator or the creditors’ committee regarding the termination of the restructuring procedure and entry into bankruptcy;
- examination of the report of the provisional administrator, or of the insolvency administrator/liquidator;
- canceling the decision of the meeting of creditors and the committee of creditors;
- the lifting of seizures on the debtor’s patrimony and the cancellation of other insurance or limitation measures of the debtor, the insolvency administrator, and/or the liquidator in the right to administer and capitalize the debtor’s assets, applied by other courts or by the bodies empowered in this sense;
- pronouncing the decision to terminate the process.
The competence of the insolvency court also includes judicial control over the activity of the provisional administrator, the insolvency administrator, and/or the liquidator.
2.6. In insolvency proceedings, do specific stakeholders’ claims enjoy priority (e.g., employees, pension liabilities)? Can the claims of any class of creditor be subordinated (e.g., equitable subordination)?
The debtor’s assets primarily cover the expenses of the insolvency process.
Unsecured claims are divided into ranks and are paid in the following sequence:
1) claims for health damage or death;
2) salary claims of the employees, except for the persons indicated in Art. 247 of Law no. 149/2012, and the remuneration due for the created service works;
3) claims resulting from credits, loans, and internal and external state guarantees granted by the Ministry of Finance (capital, interest, contractual commissions), taxes, and other mandatory payments to the national public budget;
4) claims for restitution (payment) of debts towards state and mobilization reserves;
5) other unsecured claims that are not of lower rank;
6) unsecured claims of lower rank that have the following classes:
a) the interest on unsecured creditors’ claims calculated after the filing of the lawsuit;
b) fines, penalties, and other sanctions for non-execution of obligations;
c) claims from the debtor’s free services;
d) receivables resulting from loans of an associate, shareholder, or member of the debtor or affiliated persons;
e) salary claims of the persons indicated in Art. 247 of Law no. 149/2012.
Unsecured claims are executed according to their rank. Claims of the next rank are executed only after the claims of the previous rank have been fully executed. In case of insufficiency of the debtor’s assets, the distribution of goods within the same rank is carried out proportionally.
2.7. What is a timeline for insolvency proceedings and how are they finalized?
Law no. 149/2012 does not provide for a fixed term and a timeline for insolvency proceedings. This timeline depends much on the number of creditors, the volume of the debtor’s assets, and, of course, depends on the conduct of all participants in the insolvency proceedings.
However, the law provides for certain deadlines, in which certain actions must be taken by the court or by the participants in the proceedings. For instance, according to paragraph 3 of Art. 30 of Law no. 149/2012, the term for examination of the request for initiation of the insolvency process is no more than 60 working days from the date of the acceptance of the introductory request for examination. Depending on the circumstances of the case and the valid reasons, the insolvency court may decide to extend this deadline by 15 working days.
Another example is provided in paragraph 1 of Art. 114 of Law no. 149/2012, which mentions that the insolvency administrator will prepare and submit to the meeting of creditors, within the deadline set by the insolvency court (that cannot exceed 100 days from the date of the opening of the procedure), a report on the economic situation and the causes that led to the debtor’s insolvency, mentioning the persons to whom this situation could be attributed.
Also, according to paragraph 6 of Art. 190 of Law no. 149/2012, the execution of the plan of the restructuring procedure will not exceed three years, calculated from the date of confirmation. In exceptional cases, thoroughly motivated, and provided that the debtor has complied with the restructuring plan in the first two years, the duration of the restructuring can be extended, by the decision of the meeting of creditors, only once, for a period of up to two years.
2.8. Are there any liabilities that survive the insolvency proceedings?
There is no express provision or regulation with respect to liabilities that survive the insolvency proceedings.
However, in accordance with Art.104 of Law no. 149/2012, after the initiation of the insolvency proceedings, the administrator/liquidator or any creditor with a legitimate interest, with the agreement of the administrator/liquidator, may file legal claims (including counterclaims) in the insolvency court with the purpose of canceling the transfers of assets or undertaken obligations free of charge which the debtor made in the last two years preceding the submission of the introductory request, with the exception of the undertakings of moral obligations or acts for the public good (sponsorship) in which the donor’s generosity is proportional to the value of his assets.
3.1. What formal and informal restructuring proceedings are available in your country?
In terms of restructuring, Law no. 149/2012 regulates two procedures:
1. the restructuring procedure
2. the accelerated restructuring procedure
These procedures are defined by the law as follows:
The Restructuring procedure – a procedure that applies to the debtor and which involves the drafting, approval, implementation, and compliance of a complex plan of measures in order to remediate the debtor financially and economically and pay off his debts according to the debt payment schedule.
The Accelerated restructuring procedure – a procedure by which the debtor, after an observation period, enters directly into the restructuring procedure. The purpose of the accelerated restructuring procedure is to safeguard the debtor in its financial difficulty so that it can continue its activity, keep its jobs, and pay off its debts through the implementation of a plan.
3.2. What are the entry requirements to restructuring and how are restructuring plans approved and implemented?
See Sections 3.3., 3.6., and 3.7.
3.3. Who has the right to initiate formal restructuring proceedings?
According to Art. 184 of Law no. 149/2012, the restructuring procedure is applied by the order of the insolvency court based on a decision of the meeting of creditors. The decision of the meeting of creditors regarding the application of the restructuring procedure can be a separate one at any stage after the initiation of the insolvency process. This is relevant especially when the debtor did not propose a plan together with the initial application or within the term established immediately after the initiation of the insolvency procedure.
Alternatively, in accordance with paragraph 6 of Art. 21 of Law no. 149/2012, the debtor may declare in its introductory request that it is insolvent and intends to restructure its activity. In this case, the insolvency court will initiate the insolvency process by a non-challengeable decision within 20 working days. The court will establish a deadline for the debtor to file a restructuring plan.
In accordance with Art. 188 of Law no. 149/2012, the following categories of persons can propose a plan of the restructuring procedure, under the below conditions:
a) The debtor can propose the plan at the same time with the introductory request or the reply to the introductory request, or in a separate request expressly addressed to the insolvency court, but no later than the deadline established within the reporting meeting where the restructuring was approved;
b) The insolvency administrator can propose, at the request of creditors’ meeting or creditors’ committee, or by itself, the recovery of the debtor based on a plan, from the date of its designation and until the deadline for the presentation of the plan, established at the meeting of reporting creditors at which the restructuring of the debtor was approved;
c) the authorities of the central or local public administration may propose the plan in case of insolvency of the enterprises of vital importance for the national economy referred to in paragraph 6 of Art. 190 of Law no. 149/2012;
d) the meeting of creditors or the committee of creditors can propose the plan if the debtor or the administrator has not exercised the right to propose the plan within the terms provided above.
The debtor who, in an interval of three years prior to the formulation of the introductory requests, has been the subject of a procedure established on the basis of the law on insolvency, cannot propose a plan for the restructuring procedure. The same is applicable to the debtor whose administrators, directors, and/or shareholders (members, participants) have criminal records.
3.4. What are the consequences of commencing restructuring proceedings, in particular:
3.4.1. Does management continue to operate the business and/or whether the debtor is subject to supervision?
See Section 2.4.1. which is applicable to this situation as well, in accordance with paragraph 3 of Art.184 of Law no. 149/2012.
3.4.2. Does a moratorium or stay apply, and, if so, what is its scope?
In addition, in accordance with paragraph 1 of Art. 184 of Law no. 149/2012, with the application by the insolvency court of the restructuring procedure, a moratorium is immediately instituted on the forced execution of the creditors’ pecuniary obligations existing at the date of application of the restructuring procedure. Exceptions to this rule are: claims regarding the payment of salaries and alimony, regarding the recovery of damages caused to the health of employees or with the exception of claims arising in connection with their death, claims for reclaiming assets from illegal possession, as well as pecuniary and fiscal claims whose maturity occurred in the period after the opening of the restructuring procedure. Secured creditors can demand the enforcement of the secured assets.
See Section 2.4.2. in this regard.
3.4.3. How do restructuring proceedings affect existing contracts?
The plan of the restructuring procedure may provide that, during the period of the debtor’s activity under supervision, certain contracts will be valid only after obtaining the consent of the insolvency administrator. At the conclusion of the acts of proportions or acts with conflict of interests, the debtor must request the consent of the creditors’ committee or the assembly. If, according to the last financial report, the debts that arose after the debtor’s restructuring procedure was filed, exceeded 20% of the value of the assets included in the table of validated claims, the subsequent legal acts that lead to the undertaking of new obligations of the debtor are concluded exclusively with the consent of the committee of creditors.
3.4.4. How are existing contracts treated in restructuring and insolvency processes?
See Section 2.4.3.
3.5. Can third-party liabilities be released through restructuring proceedings?
3.6. Which steps do restructuring proceedings normally include and what are the roles of the courts and other key stakeholders (such as debtor, directors of the debtor, shareholders of the debtor, secured creditors, unsecured creditors, etc.)?
In accordance with Art.182 of Law no. 149/2012, restructuring is an insolvency procedure applied to the debtor in order to pay off its debts, which provides for the preparation, approval, implementation, and compliance of a plan of the restructuring procedure, including, together or separately:
a) operational and/or financial restructuring of the debtor;
b) corporate restructuring by changing the share capital structure;
c) restricting the activity by liquidating some assets from the debtor’s patrimony;
d) any other actions not prohibited by the legislation in force.
Examining the issue of accepting the plan of the debtor’s restructuring procedure, the proposal of which was analyzed in Section 3.3., belongs to the exclusive competence of the meeting of creditors. Each class of creditors with voting rights votes separately on the plan of the restructuring procedure.
After acceptance by the meeting of creditors, the plan of the restructuring procedure must be confirmed by the insolvency court. With the confirmation of the plan of the restructuring procedure, the insolvency court may impose some conditions or restrictions on the debtor, consistent with the confirmed plan, for performing the activity.
In the organizational part, the plan of the restructuring procedure will regulate the supervision of its realization. In this case, supervision is limited to the execution by the debtor of the obligations specified in the plan. Supervisory duties fall within the competence of the insolvency administrator. In connection with this, the duties of the insolvency administrator and the members of the creditors’ committee, as well as the supervision by the insolvency court continue.
The insolvency administrator and/or the debtor’s representative will present quarterly to the creditors’ committee if it has been established, and to the insolvency court, reports on the financial situation, including the prospects for realizing the plan of the restructuring procedure. The presentation of these reports does not affect the right of the creditors’ committee and the insolvency court to request at any time additional information and reports for a shorter period. After the approval by the creditors’ committee, the reports will be registered in the insolvency court, and the debtor or the insolvency administrator will notify all creditors about this in order to consult the reports. If the debtor does not fulfill the obligations whose execution is supervised or if their execution is impossible, the insolvency administrator immediately informs the creditors’ committee and the insolvency court about this.
3.7. How are restructuring proceedings normally finalized?
According to Art. 206 of Law no. 149/2012, by the decision confirming the plan of the restructuring procedure, the insolvency court orders the termination of the restructuring procedure and the application of the plan to the debtor. According to Art. 208 of the same law, after confirming the plan of the restructuring procedure, the debtor’s activity is restructured accordingly. The claims and rights of creditors and other interested parties are modified according to the provisions of the plan.
After the decision confirming the plan of the restructuring procedure becomes final and irrevocable, the debtor regains the right to administer the debtor’s assets in accordance with the confirmed plan, under the supervision or under the leadership of the insolvency administrator, until the insolvency court orders the conclusion of the restructuring procedure and undertaking all measures for the reinsertion of the debtor in the economic activity, or the termination of the plan and the transition to bankruptcy.
During the implementation of the plan of the restructuring procedure, the debtor will be supervised by the insolvency administrator or the debtor’s representative under the supervision of the insolvency administrator. Shareholders do not have the right to intervene in the management of the activity or in the administration of the debtor’s assets, except and within the limits of the cases expressly and limitedly provided by the law and in the plan of the restructuring procedure.
If, during the implementation of the plan of the restructuring procedure, the debtor does not comply with its provisions or the plan is not implemented within the deadline, the creditors’ committee or each creditor can submit a new introductory request, which will have the effect of initiation of bankruptcy and liquidating the debtor’s assets, and no further proof of its insolvency is required. The filing of bankruptcy proceedings as a result of non-execution of the plan of the restructuring procedure leads to the revocation of the plan. In this case, the creditors whose claims were extinguished as a result of the execution of the plan are obliged to return everything they received.
4. Cross-border restructuring and insolvency
4.1. Do domestic courts in your country recognize foreign insolvency or restructuring proceedings over a local debtor?
According to Art. 467 of the Code of Civil Procedure of the Republic of Moldova, foreign court judgments, including out-of-court settlements, are recognized and enforced in the Republic of Moldova. This is done either on the basis of the international treaty to which the Republic of Moldova is a party or on the principle of reciprocity regarding the effects of foreign court judgments.
4.2. What are the preconditions for recognizing foreign decisions?
In order to be recognized and enforced on the territory of the Republic of Moldova, a foreign court judgment must be issued by a state court, including by specialized courts. These courts must be qualified under the legislation of that foreign state as courts, which are part of the judicial system. The foreign court judgment can be submitted for forced execution in the Republic of Moldova within three years from the date when it became final and binding, according to the law of the state where it was issued. The reinstatement of the deadline omitted for good reasons can be done by the court of the Republic of Moldova in the manner established in Art. 116 of the Code of Civil Procedure. Thus, the foreign court judgment becomes enforceable on the territory of the Republic of Moldova after it remains final.
4.3. Do domestic courts cooperate with their counterparts in other jurisdictions and if so, what does such recognition depend on (such as the COMI of the debtor, the governing law of the debt to be compromised, etc.)?
According to Art. 252 of Law no. 149/2012, if an insolvency process has been opened in another state against a debtor who has assets in the territory of the Republic of Moldova, execution of his assets can be initiated only if a bilateral agreement between the respective state and Republic of Moldova regarding cross-border insolvency has been concluded.
4.4. How are foreign creditors treated in restructuring and insolvency proceedings in your jurisdiction?
Depending on their priority in the enforcement of claims, creditors are divided into secured creditors, unsecured creditors, and creditors whose claims arose in connection with the filing of the insolvency process. Law no. 149/2012 operates with this unique classification of creditors and makes no difference in treatment between local creditors and foreign creditors.
5.1. Overall, do you have a more creditor-friendly or debtor-friendly restructuring and insolvency regime in your jurisdiction?
We believe that our insolvency law (Law no. 149/2012) is quite balanced with respect to rights and guarantees of the creditors and debtors, and is no more friendly to one party than the other. The insolvency law contains express and detailed guarantees with respect to both categories of subjects in the insolvency procedure.
For example, the debtor benefits from mechanisms of protection against the abusive claims advanced by the creditors which include: the presumption of inability to pay will operate only if the debtor is more than 60 days late in payment; in the reply to the introductory request (Art. 28 of Law no. 149/2012), the debtor will be able to overturn the presumption of inability to pay, by presenting evidence confirming that it has executed the pecuniary obligations or that there is a civil action related to this obligation, filed before the submission of the introductory request, or that the obligation can be extinguished by compensation, etc. On the other side, creditors are protected by using legal mechanisms such as the possibility of recovering the debtor’s assets by canceling suspicious transactions (Arts. 104 and 105 of Law no. 149/2012), the possibility of exempting secured creditors from the moratorium on debt enforcement in the cases expressly provided by law (paragraph 4 of Art. 81 and Art. 184 of Law no. 149/2012), the continuation of increasing the interest related to the guaranteed part of the debt (paragraph 3 of Art. 75 of Law no. 149/2012).