Efficiency in insolvency. The economic analysis of the legal framework for creditor protection in insolvency proceedings

Abstract

Efficiency has been and is a fundamental principle of the Romanian insolvency procedure, especially in regard to creditor protection, and is expressly written as such in law following the insolvency law reform of 2014. However, the definition of efficiency has not been analysed in Romania, within this legal framework. This study aims to use an economic analysis (Law and Economics) to present the types of efficiency that can be identified in Romanian legislation, conducting a study of the advantages and disadvantages of using these typologies in insolvency proceedings. We will consider the conceptual difficulties that may occur due to informational asymmetry and negative externalities. Finally, we will conclude by presenting the type of efficiency that the author considers adequate in a creditor protection framework considering the insolvency procedure legislation in Romania.