Judicial reorganization and bankruptcy is a procedure set up to cover the liabilities of the debtor, in insolvency, by reorganizing the company and its work, through the liquidation of some of the estate’s assets to settle liabilities or by bankruptcy.
Judicial reorganization and bankruptcy applies to all traders – commercial companies, individuals acting individually or in family associations, cooperative organizations – who are insolvent, as well as agricultural companies, as well as any other private legal person who also carries out economic activities.
Reorganization is done based on a plan – of activity reorganization or liquidation of some of the debtor’s property assets – proposed by the participants, published, voted by the creditors and confirmed by the bankruptcy judge. In developing the plan and its contents are taken into account the fact that the execution plan cannot exceed a period of three years, which commences from the date of confirmation of the plan, and the principle of equal treatment of creditors who belong to the same category. The differentiation between different categories of claims is, however, allowed.