Facts of the Case
In a recent insolvency proceeding, the judicial liquidator sought to hold the administrator financially liable for the entire outstanding liability exceeding 400,000 lei, relying on Article 169(1)(a), (d), and (e) of Law 85/2014.
The syndic judge granted the claim only partially, obliging the defendant to pay over 100,000 lei, covering:
- A receivable recorded under account 461 “Various Debtors,” for which no supporting documents were handed over;
- A sum of cash funds reflected in the company’s records that were not submitted to the liquidator.
On appeal, the defendant argued that a close relative had been managing the company in practice and that the insolvency was due to objective external factors. The Court dismissed the appeal as unfounded.
Applicable Legal Provisions
Article 169(1)(a) and (d), Law 85/2014
At the request of the judicial administrator or liquidator, the syndic judge may order that part of the insolvent debtor’s liabilities be borne by its managers or anyone who contributed to the insolvency, if they:
a) Used the company’s assets or credit for personal benefit or that of another person;
d) Maintained fictitious accounting, made accounting documents disappear, or failed to maintain accounts in accordance with the law. If documents are not handed to the judicial administrator or liquidator, both fault and causal link with prejudice are presumed (relative presumption).
Article 73(1)(c) & (2), Law 31/1990 (Company Law)
Administrators are required to ensure proper maintenance of legally required registers and are personally or jointly liable to the company for damages caused by breaching these duties.
Article 10(1), Law 82/1991 (Accounting Law)
Responsibility for organizing and managing the company’s financial accounting lies with the administrator or other responsible individuals.
Court’s Analysis
1. Use of Company Assets for Personal Benefit (Art. 169(1)(a))
Both the receivable from account 461 and the company’s cash reserves qualify as company assets. The failure to justify their use and refusal to hand them over to the liquidator was deemed a misuse in favor of the administrator or another person, satisfying the condition under letter (a).
2. Failure to Comply with Accounting Obligations (Art. 169(1)(d))
The absence of supporting documents for the receivable in account 461 showed that accounting was not maintained according to legal standards. Although some documents were handed over, their incompleteness hindered the liquidator from properly validating the receivable or clarifying the company’s status.
3. Causal Link to Insolvency
The court found that failure to hand over funds and maintain proper accounting contributed to the insolvency’s occurrence and aggravation. These funds could have been used to pay creditors, mitigating the company’s liabilities.
Conclusions and Practical Implications
- The administrator cannot absolve themselves by arguing that someone else managed the company in practice.
- Lack of primary accounting documentation indicates failure to fulfill legal accounting obligations.
- There was a clear causal link between these failures and the company’s insolvency.
As a result, the administrator was held personally liable for over 100,000 lei to partially cover the company’s liabilities. This decision reinforces legal precedent: proper document submission and company asset management are crucial in insolvency proceedings—and failing to comply attracts personal responsibility.
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This ruling reinforces judicial practice that the obligations to hand over accounting documents and to properly manage company assets are essential in insolvency proceedings, and failure to comply triggers personal liability.
If you are a company director facing financial distress or a creditor in an insolvency proceeding and wish to learn how to:
- avoid personal financial liability,
- protect your interests during the proceedings,
- or recover amounts owed by debtors,
our team of lawyers specialized in insolvency can support you.
Want to dive deeper? “Learn more in our detailed guide on personal liability in insolvency.