Selling an industrial asset in bankruptcy proceedings is a complex process, governed mainly by Law no. 85/2014 but also touching on the Civil Procedure Code and a number of other statutes. This article walks through the stages of the procedure, from the inventory to the obligations that remain after the assets have been handed over.

Who pulls at the liquidator

The procedure has many actors, each with their own interests. The secured creditor wants to recover its claim and, if possible, interest and penalties. The other creditors want to collect as much as possible, even at the risk of blocking the transaction. The buyer wants to pay as little as possible and to assume as few obligations as possible. The employees have interests of their own. The state budget is sometimes more attentive to what it can collect immediately than to the economic activity — and therefore the taxes — that a successful sale to an entity which will continue operating would generate.

All of these actors try to exert influence, and sometimes pressure, on the liquidator, including by challenging before the judge whatever they are unhappy with. Above them all presides the syndic judge, who decides in the last resort whether the liquidator's conduct complied with the legal provisions — which are sometimes unclear or incomplete.

Beyond rigorous compliance with the law and with creditors' decisions, the liquidator's work must include a command of marketing and negotiation techniques, management skills, and the ability to withstand pressure and to reconcile all these interests sufficiently for the transaction to take place.

1. The inventory. What we are going to sell

The first important stage in preparing a successful sale, and one that is sometimes neglected, is the inventory. It is carried out in accordance with articles 151 and following of Law no. 85/2014.

Under article 152 (2): "As the inventory proceeds, the judicial liquidator takes possession of the assets, thereby becoming their judicial custodian." This means that the liquidator is answerable for those assets, with all that this implies.

It is important to identify any discrepancies between the records and the physical position, and the persons responsible where assets are missing. If the inventory is done "sight unseen", from the office, the liability for missing assets falls on the liquidator, who takes possession of the assets — in theory all of them — under the inventory report. The discrepancy will come to light later, at valuation or at sale.

Equally important: every type of asset must be inventoried. As a rule the accounting department provides lists of real estate, fixed assets and possibly inventory items. But account must also be taken of bank balances, receivables, cash on hand, raw materials, stocks, work in progress, investments in progress, holdings in other companies, any off-balance-sheet assets, assets fully depreciated but still physically present, goods held in custody, licences, patents and other intellectual property rights.

2. The valuation. Where the price starts

The valuation gives us a benchmark for the opening price, the minimum price and, where relevant, the offers received. Although creditors, the court and the authorities all refer to the valuation when assessing whether a sale was successful, a valuation remains an estimate. The real price of an asset is not set by the valuation — whether the method used is market-based, income-based or cost-based. Value is determined by the market, following a competitive, transparent procedure with adequate publicity. But the valuation is required by law, and therefore mandatory.

The appointment of the valuer and the setting of the fee are governed by article 61 and article 154 (2) of Law no. 85/2014 and are subject to approval by the creditors' committee. We recommend strict compliance with the procedural rules on convening, recording votes and adopting decisions, in order to reduce the risk of challenges.

The valuation report is filed with the case file, and the practitioner is required to publish a notice in the Insolvency Proceedings Bulletin, including a summary of the valuation — article 155. Objections to the outcome may be lodged under article 62.

A practice sometimes encountered is the use of a valuation already filed in the case. In our view an older valuation may be used only if the value was estimated having regard also to liquidation value, and if it is no more than a few months old. Otherwise the report can be updated, at a lower cost in time and money. In any event, we recommend that the valuation be re-approved by the creditors.

3. The sale regulations. How we intend to sell

Depending on the nature of the asset, the practitioner may propose the type of sale considered most likely to maximise the debtor's estate: public auction, direct negotiation, or a combination. The proposal is then submitted for approval to the creditors' meeting.

The regulations set the opening price, the minimum price, the assets to be sold, the publicity formalities, the moment when title passes, and the payment terms. It must be checked whether any pre-emption rules apply — for example Law no. 422/2001 on the protection of historical monuments, or Law no. 17/2014 on the sale of agricultural land.

In our experience, the regulations should be as comprehensive as possible and tailored to the asset, while also containing clauses that allow the liquidator to take rapid decisions to break deadlocks.

A concrete example: a buyer who knows exactly how much the price will drop after each auction will be able to use that information. If instead the regulations give the liquidator the option of reducing the price, rather than the obligation, the calculation changes.

Practical recommendations for drafting the regulations:

• the classic clause "goods are sold as is, where is", specifying that by inspecting the assets, examining the documents and taking part in the auction, the buyer assumes any discrepancy discovered later, including malfunction;
• a tolerance margin: physical differences in the assets within a margin of 1-3% of value should have no impact on the price or on the procedure. At an industrial site with hundreds of tonnes of raw materials, exact measurement at the inventory stage is sometimes almost impossible, or too expensive relative to the benefit. The clause also works in reverse, where additional goods appear that have no economic value but are expensive to remove;
• the possibility of engaging specialist sales or advertising agents, specifying the commission range, or of using an additional auction platform — it is best for these approvals to be given from the outset, through the vote on the regulations;
• the cost of the tender documentation, if charged: the amount and the recipient must be stated expressly in the regulations. Court practice is not uniform, but our conclusion is that as long as the creditors approve a payment for the tender documentation, this being a matter of commercial judgment for them, no rule is infringed.

4. Approval by the creditors' meeting

The valuation report, the type of sale and the regulations are submitted for approval to the creditors' meeting. Under article 156 of Law no. 85/2014, the liquidator convenes the meeting within a maximum of 15 days of the valuation report being filed.

Approval is given by a majority vote of the creditors present, the meeting being validly held in the presence of holders of claims representing at least 30% of the total value of claims with voting rights. In practice this can lead to situations in which creditors with no practical interest in the sale decide how it will be conducted — deciding, for example, in place of the secured creditor who will receive the entire price.

The resolution is filed with the case file and published in the Insolvency Proceedings Bulletin, and may be challenged within 5 days of publication under article 48. The syndic judge may annul it strictly on grounds of unlawfulness; matters of commercial judgment cannot be reviewed as long as the creditors expressed their will lawfully.

A challenge to the resolution does not suspend the sale procedure, according to court practice and the majority view in the literature. By its Interlocutory Judgment of 15.05.2025, the Bucharest Tribunal held: "it is of no relevance that the liquidator proposed the manner of sale of the assets, once it has been approved by the Creditors' Meeting (…). Once adopted, it represents nothing other than the will of the creditors as expressed in that resolution. (…) where the legislature intended to allow a contested measure to be suspended pending resolution of the challenge brought against it, it said so clearly."

We recommend discussing the main terms of the regulations with the principal creditors before making the formal proposal. The interest is theirs; a prior discussion avoids delays in obtaining approval.

5. Publicity. Not just "a newspaper of wide circulation"

The law requires a notice to be published on the auction website administered by UNPIR and in a newspaper of wide circulation. These are the minimum steps. The phrase "newspaper of wide circulation" is unfortunately becoming ever less meaningful.

We also consider it advisable to use:

• notices on the practitioner's own website and in the Insolvency Proceedings Bulletin;
• posting the sale notice at the address of the asset and, where appropriate, at the town hall;
• trade publications;
• direct approaches to real estate agents, business consultants, investment funds, relevant players in the debtor's market, former business partners, the manufacturers of the equipment, former competitors, and targeted advertising on social media platforms.

Adequate market exposure — even over-exposure — is the best course for high-value assets, for two reasons. It can produce a price that everyone involved considers good and, secondly, it protects the liquidator against the accusations that can arise when an asset sells below the valuation estimate, which is far from rare.

6. Conducting the sale and awarding the assets

As a rule, the procedure involves:

• providing access for inspection — article 156 (4): "Interested persons may inspect the assets offered for sale after the sale notices have been published.";
• submission and careful verification of the documents required by the regulations, requesting additions where necessary, and registration for the procedure;
• holding the auctions or working through the stages of the negotiation;
• awarding the assets or designating the buyer;
• drawing up the award document. Under article 158 (2), "the award report signed by the judicial liquidator constitutes title of ownership". This does not mean that no tax invoice is issued, or that for real estate the deed need not be executed in authenticated form — all three are required;
• completing any pre-emption procedures;
• payment of the price, on the terms set out in the regulations;
• sending the documents to the notary. We recommend that the regulations provide for the liquidator to choose the notary, so that a notary familiar with insolvency proceedings can be used.

An illustration of the risk of departing from the regulations: a postponement of payment is requested. It does not seem serious, particularly where there is only one participant. But there is always the possibility that another potential participant will claim prejudice — had they known from the outset that the payment term was longer, they too would have taken part. A flexible provision in the regulations is preferable: "the payment term is X days; it may be extended by decision of the liquidator, but by no more than Y days".

7. Prior approvals and anti-money-laundering obligations

Depending on the type of activity or the value of the investment, prior approvals may be required.

CEISD approval and the decision of the Competition Council

Under Government Emergency Ordinance no. 46/2022, Competition Law no. 21/1996 and Regulation (EU) 2019/452. As a rule this is required for investments exceeding EUR 2,000,000 or, even below that threshold, for assets in strictly regulated fields capable of affecting security or public order.

The absence of this approval renders the transfer null and void. The procedure takes three to four months on average, the application being filed by the buyer after payment of substantial fees. It is useful for this stage to be set out separately in the sale regulations: if the regulations provide for the contract to be signed within 30 days while the approval takes three months, problems arise that are difficult to manage.

Notification of the environmental protection authority

Article 10 (1) in conjunction with article 15 (2) (a) of Government Emergency Ordinance no. 195/2005. The notification must be accompanied by the specific permits, if in force, and in many cases by an environmental audit prepared by an accredited expert. Following notification, the authority informs the parties of the environmental obligations to be assumed.

We draw attention to article 10 (4), which establishes the priority of environmental obligations where assets are transferred through bankruptcy proceedings.

CNCAN authorisation

Under Law no. 111/1996, for assets containing nuclear or radiological sources. This may seem a rare obligation, but experience shows it arises more often than expected: any installation or device involving the use of a radioactive source falls under this regime, including small portable devices used, for example, to inspect welds.

Prevention of money laundering

Under article 5 (1) (f) of Law no. 129/2019, insolvency practitioners are reporting entities. The liquidator is required:

• to apply customer due diligence measures, including identifying the buyer and the beneficial owner;
• to verify the source of funds where the transaction raises suspicions;
• to report suspicious transactions to the National Office for the Prevention and Control of Money Laundering, irrespective of value;
• to document the transaction and keep the records for at least 5 years.

8. The contract and the invoices

For real estate the contract is executed in authenticated form, under article 158 (2), second sentence. For movable assets the corresponding tax invoices are issued.

Practical recommendations:

• the information in the debtor's accounts must be reconciled from the outset with the public records — the land registry and the local tax office. The check should be carried out at the time of the inventory;
• if discrepancies are found, they must be corrected before the transaction is completed — this takes time, and the deadlines for invoices are short;
• invoices are submitted through the e-Factura system within 5 days of issue. Do not leave the upload to the last day: invoices with hundreds or thousands of lines are difficult to upload and sometimes produce errors;
• issue separate invoices for real estate and for vehicles, apart from the other assets. For vehicles, given the registration requirements, an invoice with hundreds of line items including vehicles is not a good idea.

Some notaries ask the seller for a tax clearance certificate. In our view article 159 (7) of the Fiscal Procedure Code applies in full, under which no such document is required for sales carried out in enforcement, insolvency and liquidation proceedings.

9. Handing over the asset

The handover is documented in a report recording utility meter readings at the time of transfer — water, electricity, natural gas — and the delivery of all keys, access codes and manuals.

Handed over against a detailed schedule are the title documents, technical data sheets, building logbooks, plans of the buildings and installations, architectural drawings, and any other technical documents. For movable assets: user manuals, safety data sheets, warranty and registration certificates, technical books, keys and codes.

The handover generally also transfers responsibility for the assets to the buyer. For that reason it should not be postponed, particularly where the assets are uninsured — a frequent situation, given the lack of funds in the proceedings.

10. What remains after the handover

Signing the documents, collecting the price and handing over the assets do not mean that the procedure is finished.

Payment of the 2% to the liquidation fund

Under article 39 (7) of Law no. 85/2014, the liquidation fund administered by UNPIR is supported by the collection of 2% of the sums recovered, including from the sale of assets in the debtor's estate. The professional statute specifies that, in bankruptcy, the percentage applies to the amount collected, exclusive of VAT.

Failure to pay this percentage constitutes a disciplinary offence, and failing to take it into account in the funds report and in the distribution plans can produce a shortfall that is hard to cover. The percentage may not seem large, but where the sums are substantial the error can make the difference between having funds for the costs of the procedure through to closure and running out of money, possibly with legal obligations left unfulfilled.

We recommend communicating this obligation to the creditors as early as the discussion of the sale price. Although the law is clear, many creditors — secured creditors in particular — appear surprised after collection that 2% goes to UNPIR as a priority. The percentage is not owed where the assets are awarded to a creditor against its claim, or where the price is set off against the claim held.

Removal from the records of the authorities

Within 30 days of the transfer, the debtor must have the assets removed from the local tax register. Correspondingly, the buyer registers them. The removal procedure also applies to certain special installations: lifts, pressure vessels, lifting equipment — items subject to the special ISCIR procedure.

Environmental obligations

Under article 10 (2) of Government Emergency Ordinance no. 195/2005, within 60 days of the completion of the sale the parties notify the environmental authority of the obligations assumed. This is not merely a reporting obligation: within the term set, the debtor must actually perform the obligations assumed — removal of waste, the necessary testing. The liquidator must budget for these operations; the cost of decontamination or of destroying hazardous waste can be very high.

Termination of supplier contracts and employment contracts

Utility and security contracts must be terminated, or taken over by the buyer, as soon as possible. The simplest solution is for the buyer to take them over, which avoids the difficulties associated with notice periods.

After the sale, dismissing the employees who worked on the transferred asset becomes unavoidable. Under article 123 (8) of Law no. 85/2014 in conjunction with article 75 (1) of the Labour Code, the liquidator may terminate the individual employment contracts, giving notice of at least 20 working days. The time limits are halved in the case of collective redundancy.

The archive

The debtor's archive can become a problem if it is stored in the asset that has been sold. The possible solutions: the historical archive already taken over by an archiving company, with the current archive held by the accountant or the liquidator; a transition period provided for in the regulations, during which the archive stays in place with a right of access for sorting; or moving the archive before the handover.

As for the technical archive — plans, drawings, operating manuals, technical books — our view is that it should stay with the equipment and buildings to which it relates, even though the holder disappears through bankruptcy. Delivering these documents to an archiving company makes no logical or technical sense: they relate to assets still in operation. They are handed over to the new owner against a report and a detailed schedule, with notification to the National Archives.

Conclusions

The sale is a complex procedure with many actors involved. Following the stages through and coordinating those actors is laborious work, requiring rigour, knowledge of the legal rules and of the necessary steps, management and coordination skills and, of course, realistic expectations about how long completion will take.

This article is not intended as an exhaustive account. The experience of other colleagues may add further stages or procedures. We believe, however, that it is useful both for those facing such a procedure and for creditors and courts which — not always having access to what goes on behind the scenes — may not appreciate the full complexity of the exercise, or the reason why things do not always move as quickly and as simply as one would expect.

Written by Florin Daniel Barbu, attorney at law and insolvency practitioner, member of the Board of INPPI. Originally published in Phoenix, the insolvency review of the National Union of Insolvency Practitioners of Romania, 2025. The topic was also presented at the National Insolvency Conference, Bucharest, June 2025, and at the Iași Conference, October 2025.