Insolvency 2021

Last Updated November 23, 2021

Poland

Law and Practice

Authors



Tatara & Partners Restructuring & Insolvency Law Firm specialises in restructuring and insolvency law, with a particular focus on pre-packs and quick restructuring. It has offices in Kraków and Warsaw, and advises businesses facing financial difficulties as well as those optimising or developing their businesses. Clients include business owners, members of management boards and supervisory boards. The team handles the most complicated and complex projects in Poland, and the lawyers' experience and deep understanding of business in general enable them to offer top-level legal services tailored to a client’s needs. The firm has successfully advised in many of the most innovative, precedential and high-value projects, including for well-known public companies that are listed on the main market of the Warsaw Stock Exchange. It conducted the very first pre-pack sale in Poland and has experience in various roles in every new proceeding introduced by the Restructuring Law.

Market Overview

The restructuring market in Poland is currently feeling the impact of the COVID-19 pandemic. The government has introduced a moratorium on the duty to file for bankruptcy as long as the insolvency is due to the COVID-19 situation.

Statistics

In Poland, the Restructuring Law has been in operation since 2016. The earlier regulation provided for bankruptcy with the possibility to make an arrangement. Starting from this reform, Polish law in this area has been governed by two legal acts: the Restructuring Law and the Bankruptcy Law. Since their introduction under the so-called anti-crisis shield 4.0 in June 2020, simplified restructuring proceedings have become the most popular restructuring proceedings among businesses.

In simplified restructuring proceedings, the announcement in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy) is equivalent to the opening of the proceedings by the court, with an important change being that the announcement is made by the debtor himself.

There have been more than 1,600 simplified restructurings to date, and this number is steadily growing.

By contrast, the other restructuring proceedings statistics for 2020 are as follows:

  • proceedings to approve the arrangement – two;
  • accelerated arrangement proceedings – 140 proceedings in total;
  • arrangement proceedings – 29 proceedings in total; and
  • remedial proceedings – 74 proceedings in total.

On the other hand, the number of consumer bankruptcy proceedings is growing in Poland, with more than 13,000 in 2020, and 9,067 in the first six months of 2021, expected to hit 17,000 (or more) by the end of this year. Overall, the number of insolvent companies in Poland has continued to grow, reaching 1,841 in the first nine months of 2021, which is 130% higher than in the same period of 2020.

These growing numbers require changes in the judicial system in Poland and an efficient electronic registry to manage the proceedings. It is noteworthy that the number of companies officially declared insolvent would have been even higher if the courts’ operations had not been curtailed in 2020 due to the COVID-19-related restrictions.

The industry sector most affected by the COVID-19 pandemic is HoReCa (hotels, restaurants and catering), which has seen a high number of redundancies and business shut-downs. Airlines, event organisers and transport companies were also hit hard by the pandemic.

Many businesses only survived because of the governmental anti-crisis measures. Simplified restructuring proceedings were also an instrument that alleviated the distress caused by the pandemic, at first as a temporary tool: they were initially set to last only until 30 June 2021, then extended to 30 November 2021, and later made permanent by amending the proceedings to approve the arrangement. Some new amendments are due to come into force in December 2021.

This is a wide range of restructuring and insolvency possibilities in Poland, for businesses as well as bankrupt consumers.

Consumers can use bankruptcy proceedings, and the proceedings to approve the arrangement at the creditors' meeting. They are not entitled to resort to restructuring proceedings.

Entrepreneurs, operating in different legal forms (eg, sole proprietorship, partnerships or companies), have a wide array of legal tools at their disposal, ranging from the four restructuring proceedings regulated in the Restructuring Law to simplified restructuring, judicial liquidation, out-of-court restructurings (using standstill agreements, among others), pre-pack sale and corporate bankruptcy proceedings.

There are plenty of options and choices relating to possible restructuring proceedings in Poland, especially after the reform of 2016. Apart from formal insolvency proceedings, the following voluntary proceedings are available for entities that are insolvent or at risk of insolvency:

  • simplified restructuring proceedings;
  • proceedings to approve the arrangement;
  • accelerated arrangement proceedings;
  • arrangement proceedings;
  • remedial proceedings;
  • pre-pack sale after declaring bankruptcy; and
  • partial arrangements (limited to receivables that have significant meaning for the debtor’s business) – these are possible within simplified restructuring proceedings, proceedings to approve the arrangement and accelerated arrangement proceedings, and also as additional proceedings within the remedial proceedings.

See also 1.1 Market Trends and Changes for the statistics relating to insolvencies in Poland.

Article 21 of the Bankruptcy Law provides for the duty to file a bankruptcy petition.

This obligation is imposed on the management board members or the debtors themselves. Failure to comply with this obligation may lead to civil law liability for the damage caused towards creditors, and also to other types of legal liability – eg, criminal liability.

Possible legal liability is based on:

  • Article 299 of the Commercial Companies Code;
  • Article 300[132] of the Commercial Companies Code;
  • Article 586 of the Commercial Companies Code – penal liability;
  • Article 116 of the Tax Ordinance;
  • Article 21.3 of the Bankruptcy Law; and
  • Article 373 of the Bankruptcy Law.

Therefore, Polish law is based on a high standard of management, where board members are familiar with the current financial situation of the company, and adequately react to challenges.

In Poland, creditors may also file a bankruptcy petition on behalf of the debtor, especially when they notice that the debtor or its management board fails to file for bankruptcy by themselves.

The creditor should indicate in the petition as probable (there is no standard of proof) the receivable debt and the premises for the declaration of bankruptcy – namely, the state of insolvency and the existence of at least one other creditor.

When it comes to restructuring proceedings, a creditor can initiate remedial proceedings only. Remedial proceedings may be instituted against a legal person (limited liability company, simplified joint-stock company or joint-stock company) that is insolvent.

Under Polish law, the premise upon which to commence involuntary insolvency proceedings is the state of insolvency. However, with regard to voluntary proceedings, the premise could be either insolvency or the threat of insolvency.

Article 11 of the Bankruptcy Law provides that a debtor is insolvent when he or she has lost the ability to fulfil his or her outstanding pecuniary obligations.

The state of insolvency is also met when the pecuniary obligations of a legal person or an organisational unit without legal personality upon which a separate Act confers legal capacity are in excess of the value of its assets, and this state persists throughout a period exceeding 24 months.

The loss of the ability to fulfil outstanding pecuniary obligations should be permanent. The law provides for a presumption of insolvency when the delay in fulfilling the pecuniary liabilities is in excess of three months. This presumption may be rebutted in the proceedings to declare bankruptcy.

The threat of insolvency is defined by Article 6.3 of the Restructuring Law, which stipulates that the debtor is threatened by insolvency when its economic situation indicates that he or she may become insolvent in a short time. This definition relates directly to the insolvency status as defined in the Bankruptcy Law.

Under Polish law, there are specific statutory regimes for the following:

  • banks and credit unions;
  • real estate developers;
  • investment firms or entities engaged in payment systems and securities settlement;
  • insurance companies; and
  • bond issuers.

These specific regimes are based on the need to differentiate between traditional insolvency or restructuring law provisions and the different situation with regard to stakeholders of the above-mentioned entities.

A bank's insolvency is regulated under a separate regime after the implementation of the EU Bank Recovery and Resolution Directive (in the Act on the Banking Guarantee Fund, deposit guarantees and resolution). This special regime is known as the bank resolution.

Consensual restructuring is becoming more and more popular in Poland, mainly because of the length and uncertainty of formal court proceedings.

Banks and other financial institutions are usually willing to be engaged in consensual restructuring proceedings, and frequently use the standstill agreements. However, it must be noted that such consensual and out-of-court restructuring proceedings must be initiated at an early stage of financial difficulties. Only banks will be able to establish that the debtor is trustworthy and has a good chance of restructuring efficiently.

However, in general, consensual restructuring is used mainly by bigger companies, probably because of the involvement of banks and the internal bank regulations on low-quality or lost receivables and the requirement to make write-downs.

There is also no requirement for a previous, consensual restructuring before formal court proceedings can be initiated.

One of the issues consensual restructurings are still less popular than formal restructuring or insolvency proceedings is that out-of-court workouts and similar restructuring proceedings do not free the management board from the legal liability towards creditors when the restructuring process fails. This should lead to the standard of early reaction processes in the debtor companies, especially when there is a threat of insolvency.

Consensual restructuring is usually commenced by a standstill agreement with all important creditors, especially banks, as its parties.

Later on, the restructuring agreement is negotiated, where typical undertakings include the sale of some assets of the debtor, the optimisation of the costs and an increase of revenues, sometimes opening to new markets or using different restructuring plans. On the other hand, a market standard provides for steering committees that supervise the restructuring process – such committees usually have the right to receive financial and other information on the current and ongoing business situation of the debtor, followed by the inspection of the books.

New money and new security are sometimes granted in the restructuring agreements.

The provisions for not meeting the standards described in the agreement and possible creditors’ rights in such cases apply.

The issue of new money (also known as fresh money) within restructuring proceedings is important, yet financial institutions are very careful with regard to granting it.

Although there is a preference in the ranks of claims in the Bankruptcy Law, unfortunately new money is not very popular. Maybe the problem lies in the Banking Law requirements for the assessment of solvency (creditworthiness) and a strict approach to non-obvious situations.

In some circumstances, some securities granted and established with new money may be deemed ineffective with regard to the remedial or bankruptcy estate.

In an out-of-court restructuring, creditors have obligations resulting from a standstill or restructuring agreement. In other situations, Polish law provides that the members of a creditors' committee should take the interest of the creditors as a whole group into consideration, rather than those of individual members. Following general legal principles, a duty to act in good faith with respect to restructuring proceedings may also be relied upon.

Polish law does not provide for the possibility to conduct out-of-court financial restructuring proceedings with dissenting parties.

Mechanisms like cross-class cram-downs or division into groups of creditors are available under the Restructuring Law and are frequently used in formal restructuring proceedings.

There are several possibilities with regard to securities in Poland.

Registered Pledge

A registered pledge can be established on movable property and transferable property rights. It is governed by the Act on Registered Pledge and Registry of Pledges. It is necessary to sign the pledge agreement and subsequently enter the pledge into the Register of Pledges in order to successfully establish a registered pledge. The pledge agreement should be made in writing.

Mortgage

A mortgage may be established on immovable property, and is governed by the Act on Land and Mortgage Registers and Mortgage. There are two main types of mortgages regulated under this Act: a contractual mortgage and a compulsory mortgage. The mortgage is established effectively if the relevant entry has been made in the Land and Mortgage Register. It is also necessary to comply with the requirements relating to the document that constitutes the basis for entering a mortgage into the Land and Mortgage Registry (eg, notarial deed, court’s decision in the case of a compulsory mortgage), as well as the requirements regarding the form of the document (drawn up in writing with a signature certified by a notary, or in the form of a notarial deed).

A mortgage and registered pledge become effective once a competent court makes a relevant entry in the Land and Mortgage Registry or the Registry of Pledges, respectively.

If the application for entering a mortgage or registered pledge into a respective register does not comply with the formal requirements set out in Polish law, depending on the degree and type of the defect (in particular, errors and omissions), the court will request the applicant to rectify the errors or omissions, under the pain of returning the application to the party, or it dismisses the application if the given defect is incorrectable.

There are also less popular securities in the Polish legal system – eg, an ordinary pledge, a treasury pledge or a maritime mortgage.

A security will be enforced most often in judicial proceedings, so the biggest practical issue related thereto is the necessity to involve the court, in that enforcing a security may take a lot of time.

Moreover, it is commonly necessary to initiate enforcement proceedings with the involvement of a court bailiff (enforcement officer) after obtaining the enforcement title in judicial proceedings. In most situations, enforcing a security requires the creditor to take a number of actions, which extends the duration of the proceedings. Furthermore, the initiation of legal proceedings also entails the payment of court fees.

In some cases, it is possible to reduce the number of actions that need to be taken in judicial proceedings (eg, in the case of a notarial deed in which the debtors submit themselves to enforcement) and within extrajudicial proceedings – eg, in the case of taking over ownership of the pledged property or by sale of an asset encumbered with a registered pledge in a public tender conducted by a notary or court bailiff (enforcement officer).

The above-mentioned rights can also be exercised in restructuring situations, but they cannot legally block or disrupt restructuring proceedings. Of course, the enforcement of security may make restructuring impossible practically, so it is important to talk and communicate with secured creditors.

Secured creditors enjoy special treatment under Polish law, because their secured receivables are subject to satisfaction from the sum obtained by liquidation of the encumbered object.

The general rule regarding different classes of creditors is that secured creditors are satisfied from the sale of an encumbered object, while other creditors are treated globally in insolvency, according to the rank of their claims.

The rank of claims is regulated under the Bankruptcy Law. The main rule is to satisfy claims with the highest priority (satisfy in the first place) –ie, the costs of proceedings and other liabilities of the bankruptcy estate. The latest amendments to the Bankruptcy Law introduced the priority for the amounts received from the liquidation of the living accommodation of a bankrupt who is a natural person. It stipulates that it is necessary to satisfy the housing needs of the bankrupt and the persons dependent on him or her with an amount corresponding to the average lease rent of living accommodation for a period from 12–24 months, which will be awarded to the bankrupt from the amount earned from the sale of such accommodation or house.

The remaining claims are satisfied in the order specified in Article 342 of the Bankruptcy Law, depending on the category into which they fall (claims falling into the lower category may be satisfied only if claims falling into higher categories have been fully satisfied). The first category of claims covers employees’ claims, maintenance claims and workers’ compensation, social security contributions defined in the Social Security System, certain amounts resulting from restructuring proceedings of the debtor, etc.

Polish law does not provide for keeping unsecured trade creditors whole, but they may be a separate group within the restructuring proceedings.

Under Polish law, unsecured creditors have the right to take part in the proceedings, file petitions and motions. They are also entitled to be satisfied, but cannot legally block or disrupt the proceedings.

In Poland, pre-judgment attachments are not used, as neither the Restructuring Law nor the Bankruptcy Law provide for a regulation thereof. However, the transfer of ownership prior to a court judgment is possible in practice, especially with regard to a registered pledge with the possibility to attach ownership (taking over the subject of the pledge).

Under Polish law, the cost of the proceedings and employee and pension claims enjoy preferred treatment.

With regard to secured creditors, their receivables are subject to satisfaction from the sum obtained by liquidation of the encumbered object, minus the costs of liquidation of said object and other costs of bankruptcy proceedings in an amount not higher than one-tenth of the sum obtained by liquidation, but no more than such part of the costs of the bankruptcy proceedings the result from the ratio of the value of the encumbered object to the value of the whole bankruptcy estate.

In Poland, there are currently four restructuring proceedings:

  • proceedings to approve the arrangement;
  • accelerated arrangement proceedings;
  • arrangement proceedings; and
  • remedial proceedings.

A variant of the proceedings to approve the arrangement – simplified restructuring proceedings – is also available, and is described in detail below.

There is also a possibility to conclude a partial arrangement, covering selected creditors based on objective criteria. The conclusion of a partial arrangement is allowed in proceedings to approve the arrangement and accelerated arrangement proceedings.

There are various forms of restructuring the debtor’s obligations within all kinds of restructuring proceedings, such as debt-for-equity swap, reducing the amount of the debtor’s obligations or spreading repayment into instalments. It is also permissible, exceptionally, to vote, conclude the arrangement and adopt it within bankruptcy proceedings.

One of the most interesting new tools is the pre-packaged sale (pre-pack), regulated in the Bankruptcy Law. A pre-pack is not yet as popular in Poland as it is in the USA or UK, for instance, where around 25% of all applications concern a pre-pack, and some of the highest value acquisitions are made within pre-packaged liquidation procedures. However, there are solid grounds to presume that the pre-pack procedure will gain popularity in Poland, mainly because an investor enjoys the execution sale effect in a pre-pack acquisition, which means that the investor is not liable for the liabilities and commitments of the debtor secured on the subject of pre-pack.

Moreover, transactions executed within the pre-pack procedure are relatively quick and the investor buys an enterprise as an operating business, ready to continue trading. The pre-pack sale is also possible in favour of affiliated entities, but then the price paid must be at least the price stated by the court’s appraiser. The decision of whether or not to approve the sale-purchase conditions is made by the Bankruptcy Court, along with the decision regarding the declaration of bankruptcy.

The latest amendments to the Bankruptcy Law reorganised the pre-pack procedure and introduced auction-like instruments. Where at least two applications for approval of the terms of sale have been filed, an auction will be conducted between acquirers in order to select the most favourable terms of sale. The submission of the application for approval of the terms of sale is announced in order to inform creditors and potential acquirers of the possibility of attaching their application to their own bid for the acquisition of the business in a pre-pack procedure. The pre-pack is intended for selling an enterprise as an ongoing business, with the execution sale effect entailing significant benefits, meaning that the investor is not liable for the liabilities and commitments of the debtor. The application for approval of the terms of sale may refer to more than one acquirer. In general, recent amendments to the Bankruptcy Law concerning the pre-pack provisions should be regarded as favourable, but a lot depends on how seamlessly the bankruptcy courts will operate, especially with regard to time issues.

For each of the restructuring proceedings, the debtor may file upon insolvency or threat of insolvency. For proceedings to approve the arrangement and accelerated arrangement proceedings, there is an additional premise: such proceedings may be conducted if the total sum of disputed receivable debts giving the right to vote on the arrangement does not exceed 15% of the total sum of receivable debts giving the right to vote on an arrangement, while for arrangement proceedings and remedial proceedings the sum of disputed claims may exceed 15% of the total sum of receivable debts giving the right to vote on an arrangement.

With regard to the position of the company, the management of the debtor’s enterprise remains in the hands of the current board members but is performed under the supervision of the court supervisor (it is possible to revoke the debtor’s administration of the enterprise in certain circumstances – eg, if the debtor violated the law with regard to the administration of assets thereby causing or threatening to cause detriment to the creditors). In remedial proceedings, however, the court appoints a receiver, who usually takes over management of the debtor’s enterprise.

A restructuring plan is prepared by the arrangement supervisor (within proceedings to approve the arrangement) or by the court supervisor (within accelerated arrangement proceedings and arrangement proceedings). The restructuring plan is then implemented by the debtor under the supervision of the appointed supervisor.

Within remedial proceedings the restructuring plan is prepared by the receiver, who is also responsible for implementing the restructuring plan once it is approved by the judge-commissioner. The creditors vote on the arrangement once the restructuring plan is implemented fully or in part.

The court and the appointed judge-commissioner supervise the course of the proceedings.

The company may borrow additional money and it is also possible for the Bankruptcy Court to ask creditors for advance payment of the costs of the proceedings.

Creditors are one of the most important stakeholders of restructuring proceedings, because they vote on arrangement proposals.

Creditors can be divided into classes and vote separately. In proceedings with a partial arrangement, restructuring may be limited to separate categories of creditors.

It is possible within restructuring proceedings to establish a creditors' committee, which may appoint a new supervisor or the receiver, or decide that the administration of the enterprise should be kept by the debtor, among other functions. Creditors may also submit their own arrangement proposals.

A creditors’ committee exercises control and supervision over the acts of the court supervisor and the receiver. It may audit the books and documents of the debtor’s enterprise and demand explanations from the debtor.

A creditors’ committee is entitled to grant permission for several actions of the debtor, such as:

  • encumbering components of the arrangement estate or remedial estate with a mortgage, pledge, registered pledge or maritime mortgage in order to secure a receivable debt that is not covered by the arrangement;
  • transferring ownership of things or rights for the purpose of securing a receivable debt that is not covered by the arrangement;
  • encumbering components of the arrangement estate or remedial estate with other rights;
  • taking out credits and loans;
  • selling assets with a value exceeding PLN500,000; or
  • concluding a contract of tenancy of a debtor’s enterprise or an organised part thereof, or any other similar contract.

Members of a creditors’ committee can act with advisers, but funding should be secured by themselves. A creditors’ committee member is entitled to the reimbursement of necessary expenses involved in his or her participation in a meeting of a creditors' committee. The judge-commissioner may grant an appropriate meeting attendance remuneration to a member if it is justified by the kind and degree of complexity of the case and the extent of the work performed.

Individual creditors can also receive information from the case files and the court supervisor or the receiver. After implementation of the National Debtors Registry (Krajowy Rejestr Zadłużonych), it will be much easier for all stakeholders to receive information and keep up-to-date especially creditors.

Polish law provides for the possibility of a cram-down, and even a cross-class cram-down. This mechanism requires the division of creditors into groups (classes).

In such a case, there is a possibility that, despite not having obtained the necessary majority in some groups (classes) of creditors, the arrangement is adopted if the creditors holding jointly two-thirds of the total sum of receivable debts to which voting creditors are entitled voted in favour of the adoption of the arrangement and if the creditors from the group or groups (classes) that voted against the adoption of the arrangement will be satisfied on the grounds of the arrangement to an extent no less favourable than in the event of conducting insolvency proceedings.

Under Polish law, there are no formal obstacles to trading claims against the debtor, but a creditor will not have a voting right under a receivable debt they acquire by a transfer or endorsement after the opening of restructuring proceedings.

There is one exception to this, which provides for the situation when the discharge of the receivable debt occurred as a result of the repayment by the creditor of a debt for which he or she was liable either personally or with specific property items or under a legal relationship whose establishment predated the opening of restructuring proceedings, or where the acquisition of the receivable debt occurred after a special procedure was followed – where the information on the procedure and venue of sale of the receivable debt has been announced in the registry and the receivable debt was transferred to the acquirer that offered the highest amount.

Although Polish law does not provide for a special regime for restructuring corporate groups, legal tools offered by the Restructuring Law can be used to achieve this goal, albeit in separate proceedings.

Moreover, it is worth pointing out that Polish law allows for an open catalogue of arrangement proposals. Consequently, changes in a company's articles of association or debt-to-equity swaps are permissible, and may be useful tools in restructuring corporate groups.

In most restructuring proceedings, the debtor is limited in its use of assets – namely, after the appointment of a court supervisor, the debtor may perform acts of ordinary administration. The performance of any acts beyond the scope of ordinary administration requires the consent of the court supervisor, unless statutory law provides for the consent issued by the creditors’ committee.

These acts are as follows:

  • encumbering components of the arrangement estate or remedial estate with a mortgage, pledge, registered pledge or maritime mortgage to secure a receivable debt that is not covered by the arrangement;
  • transfer of ownership of things or rights for securing a receivable debt that is not covered by the arrangement;
  • encumbering components of the arrangement estate or remedial estate with other rights;
  • taking out credits and loans;
  • concluding a contract of tenancy of a debtor’s enterprise or an organised part thereof, or any other similar contract; and
  • the sale by the debtor of immovable properties or other component assets with the value above PLN500,000.

Consent may also be granted after the act has been performed, within 30 days of its performance. Any act beyond the scope of ordinary administration that was performed without the required consent is invalid.

When there is no creditors’ committee appointed, consent will be granted by the judge-commissioner.

However, more strict restrictions apply to remedial proceedings, where after the opening of the proceedings the debtor is obliged to disclose and surrender to the receiver all his or her assets and to submit all the relevant documents relating to his or her activities, assets and settlements, including accounting books, other records maintained for tax purposes and correspondence.

Under Polish law, the sale of assets will usually be treated as being beyond the scope of ordinary administration, and thus requiring the consent of the court supervisor or the creditors’ committee.

Within remedial proceedings, parts of property owned by the debtor and included in the remedial estate may be transferred by the receiver with consent of the judge-commissioner, who determines the conditions of their transfer, and this sale enjoys the same effects as a sale effected by the trustee in bankruptcy proceedings, so is free of other claims.

This rule does not apply if component parts of property are transferred within the scope of the conducted economic activity and within the scope of ordinary management; in other words, they may be transferred by the receiver without further consent, but with no execution-sale effect.

During the restructuring proceedings, liens and other security may be released upon the secured creditor’s consent, with the exception of remedial proceedings, where a sale by the receiver with the consent of the judge-commissioner enjoys an execution-sale effect, and thus the subject of the sale is no longer encumbered.

New security may be granted subject to the creditors’ committee consent.

According to Article 129 of the Restructuring Law, new money (a receivable debt that is not covered by the arrangement) may be secured on the components of the arrangement estate or remedial estate with a mortgage, pledge, registered pledge or maritime mortgage, subject to the consent of the creditors’ committee.

In arrangement proceedings and remedial proceedings, objections to the list of receivables are possible, and there is a possibility to determine the value of the claims and securities within this objections procedure.

The so-called restructuring plan in Polish legal terminology is an arrangement that is subject to the court’s approval. The court also approves the restructuring plan in a narrow sense, under which the proceedings are carried on.

Intercreditor agreements are not regulated under Polish law, but they are not prohibited.

Moreover, in remedial proceedings, a receiver may renounce a mutual contract that has not been carried out in full or in part before the day of the opening of remedial proceedings, with the judge-commissioner’s consent if the other party’s performance resulting from said contract is an indivisible performance.

If the receiver renounced the contract, the other party may demand the return of the performance fulfilled after the opening of remedial proceedings and before it received the declaration on contract renunciation, if the performance is included in the debtor's assets. If this is impossible, the other party may only seek the recovery of receivable debts in respect of the discharge of the obligation and losses incurred, while these receivable debts are not covered by an arrangement.

In light of the rule of an open catalogue of arrangement proposals, it is possible to release other parties, such as debtors’ affiliates, from liabilities, but they must grant their consent thereto.

On the other hand, the non-debtor parties may guarantee the performance of the arrangement and also grant additional liens or security.

Under Polish law, the set-off of mutual receivable debts between the debtor and the creditor is inadmissible from the day of the opening of restructuring proceedings until the day of their completion or the day of the ruling on the discontinuance thereof becoming final and non-appealable, if the creditor:

  • has become a debtor of the debtor after the day when restructuring proceedings were opened; or
  • being a debtor of the debtor has, after the day when restructuring proceedings were opened, become his or her creditor through the acquisition by a transfer or endorsement of a receivable debt that arose prior to the day of the opening of the proceedings.

The set-off of mutual receivable debts is permitted if the acquisition of a receivable debt occurred through paying off a debt for which the acquirer was liable either personally or with certain property items, and where the acquirer became liable for the debt before the date of the filing of the application for the opening of restructuring proceedings.

It is also important that set-off is possible within the proceedings to approve the arrangement and in simplified restructuring proceedings.        

When the debtor fails to fulfil the provisions of an arrangement, the debtor, arrangement supervisor or creditor may file a petition to amend the arrangement or set aside the arrangement.

The restructuring plan may be amended within the proceedings at the previous stages.

Under Polish law, the restructuring plan should be submitted upon the opening of restructuring proceedings, and it differs from both arrangement proposals and the arrangement itself.

Under Polish law, although equity owners cannot vote on the arrangement (even when they are creditors), they may be granted some rights in the arrangement, bearing in mind the principle of an open catalogue of arrangement proposals.

Insolvency Proceedings

Under Polish law, there is one insolvency procedure: liquidation bankruptcy. The Bankruptcy Law stipulates that the debtor loses the right to manage and operate his or her business as a result of declaring bankruptcy; the trustee appointed by the Bankruptcy Court temporarily takes over the duty of managing and operating the debtor’s business (for the duration of the bankruptcy proceedings). The court and the appointed judge-commissioner supervise the trustee and issue several decisions within the course of the proceedings. A creditors' committee may be established, which receives several competences of the judge-commissioner. Individual creditors can also receive information, and may play an active role within the proceedings.

The recent amendments to the Bankruptcy Law introduced a new solution for debtors who are natural persons other than sole traders (consumer debtors) by implementing a possibility to conclude an arrangement between the debtor and the creditors. Moreover, consumer bankruptcy proceedings provide for the institution of residual debt release. Once a part of the debtor’s obligations is fulfilled in accordance with the creditors’ repayment plan, the debtor may be released from the rest of his or her liabilities.

Liquidation

In Poland it is possible to liquidate a company or partnership, by way of liquidation proceedings regulated under the Commercial Companies Code.

Stay of Enforcement

Under the Polish Bankruptcy Law, declaring bankruptcy results in a stay of enforcement proceedings and the issuance of a moratorium on commencing such proceedings. If bankruptcy is declared by the court, administrative proceedings in respect of the bankruptcy estate may be initiated and continued by the trustee only, or against him or her. The trustee conducts proceedings on behalf of the bankrupt entity, but in his or her own name.

By operation of law, enforcement proceedings initiated prior to the declaration of bankruptcy should be stayed on the date of the declaration of bankruptcy. Once the decision on declaring bankruptcy becomes final and non-appealable, such proceedings should be discontinued, by operation of law. Declaring bankruptcy is not an obstacle to awarding immovable property ownership if the bid for the property was validly knocked down prior to the declaration of bankruptcy and the execution acquirer pays the acquisition price on time.

Netting

Where a framework contract to which the bankrupt is a party stipulates that individual detailed contracts in financial futures, financial instrument lending or repurchases of financial instruments (netting) are to be entered into in fulfilment of the framework contract and that the termination of the framework contract has the effect of causing the termination of all the detailed contracts entered into in fulfilment thereof, the following applies:

  • receivable debts arising under individual detailed contracts entered into in fulfilment of the framework contract must not be included in an arrangement concluded in bankruptcy proceedings; and
  • the trustee is not vested with the powers of rescission of the framework contract.

Set-off

The setting-off of a receivable debt of the bankrupt against a receivable debt of a creditor is permitted where both receivable debts existed on the day of the declaration of bankruptcy, even if the maturity date of one of them has not yet arrived.

The bankrupt’s receivable debt is presented for set-off in the full amount, while that of the creditor is presented only in an amount equal to the principal receivable debt and interest accrued until the date of the declaration of bankruptcy.

Where an interest-free debt of the bankrupt is not due on the day of the declaration of bankruptcy, an amount taken into account for set-off purposes is that of the amount receivable minus statutory interest (which in no case may exceed 6%) from the date of the declaration of bankruptcy to the maturity date, and for no more than two years.

No set-off is permissible where a debtor of the bankrupt acquired the receivable debt by means of assignment or endorsement subsequent to the declaration of bankruptcy, or acquired it during the last year before the date of the declaration of bankruptcy while being aware of the existence of a ground for the declaration of bankruptcy.

However, as an exception, set-off is permitted where the acquirer has become a creditor of the bankrupt through repaying the bankrupt’s debt for which the acquirer was liable either personally or with specific property items, and if at the time of assuming liability for the bankrupt’s debt the acquirer was not aware of the existence of grounds for the declaration of bankruptcy. A set-off is permitted at all times where the assumption of liability occurred one year before the declaration of bankruptcy.

Additionally, no set-off is permitted where the creditor has become a debtor of the bankrupt after the date of the declaration of bankruptcy.

Milestones of Insolvency Proceedings

Insolvency proceedings are distributed in time but many actions may be taken simultaneously. However, some milestones can be observed.

The first milestone is the date and deadline for submitting claims by the creditors. Delayed filing is acceptable, but a mandatory fee is then required and, regardless of the reason for the delay, acts already transacted under the bankruptcy proceedings have effect against this creditor. The submission of claims has no bearing on the distribution plans already submitted, and the creditor's recognised receivable debt is taken into account only in the plans made after the recognition thereof.

Later on, the list of receivable debts is submitted and made available in the Bankruptcy Court for examination. The creditor (and also, under certain circumstances, the debtor) has the right to file an objection, and to appeal if the objection is unsuccessful.

In the meantime, the liquidation is processed by the trustee. The distribution plans are drafted and approved, as they constitute a legal basis for the disbursement towards the creditors. Distribution plans may also be appealed.

Also, ineffectiveness and claw-back legal actions may be issued by the trustee independently during the course of proceedings.

However, when the proceedings do not satisfy the cost of the proceedings (and creditors did not make advance payments therefor), the court may decide to discontinue such proceedings.

The sale of assets is managed by the trustee, who should report the current status to the judge-commissioner.

The trustee should also obtain the consent of the creditors’ committee for the following:

  • the trustee continuing to run the enterprise, if it is to be continued for more than three months from the day of the declaration of bankruptcy;
  • forgoing the sale of the enterprise as a whole;
  • the unrestricted sale of property included in the bankruptcy estate;
  • taking out loans or credits, and encumbering the bankrupt’s assets with limited rights in rem; and
  • recognising, waiving or making a settlement in respect of disputed claims and submitting a dispute to a conciliatory court for determination.

No creditors’ committee consent is required for the sale of movable property where the estimate value, as shown in the inventory stock-count, of all movable properties included in the bankruptcy estate is equal to or less than PLN50,000, nor for the sale of receivable debts and other rights within such value.

A bankruptcy sale enjoys an execution-sale effect, which means that the purchaser acquires assets free of claims and liabilities asserted against the debtor.

Creditors' committees are much more popular in restructuring proceedings than in insolvency proceedings (see 6.3 Roles of Creditors).

The members are selected and the committee is established by the judge-commissioner acting either ex officio where he or she finds this advisable, or in response to a petition filed by the bankrupt, no fewer than three creditors, or a creditor or creditors holding jointly no less than one-fifth of the sum of receivable debts (with exclusions for affiliated entities and the acquirers of the receivable debts). The judge-commissioner can also change the members.

The creditors’ committee consists of five members and two deputies, appointed from among those creditors of the debtor who are participants of the proceedings. In rare and smaller cases (fewer than seven creditors), the number of members may be three (and one deputy).

The creditors’ committee assists the trustee, inspects his or her acts, examines the status of bankruptcy estate funds, authorises acts that may not be performed otherwise than with the consent of the committee, and gives opinion on other matters if required to do so by the judge-commissioner or the trustee. When discharging its duties, the creditors' committee shall be guided by the interests of all the creditors.

For the list of acts requiring consent of the creditors’ committee, see 7.2 Distressed Disposals.

Members of creditors' committees can act with advisers, but funding should be secured by themselves. Creditors' committee members are entitled to the reimbursement of necessary expenses involved in their participation in a meeting of a creditors’ committee. The judge-commissioner may grant a member an appropriate meeting attendance remuneration if it is justified by the kind and degree of complexity of the case and the extent of work performed.

Since the Republic of Poland is a member of the European Union, EU Regulation 2015/848 applies to the recognition of proceedings.

Poland has numerous bilateral agreements with other countries, recognising insolvency and restructuring proceedings.

Arrangements with foreign courts to co-ordinate proceedings exist under EU Regulation 2015/848, which is in full force in Poland.

With regard to non-EU countries, neither the Bankruptcy Law nor the Restructuring Law provides for such co-ordination, as there are rules on communication but no formal procedure of statutory co-operation.

Under EU Regulation 2015/848, the key factor is the so-called "centre of main interests" (COMI), which is the place where the debtor conducts the administration of its interests on a regular basis and which is ascertainable by third parties.

The main insolvency proceedings are carried on in the COMI country, while secondary insolvency proceedings are carried on in other countries where the debtor has assets.

The law applicable to insolvency proceedings and their effects is that of the Member State within the territory of which such proceedings are opened, with the following exceptions:

  • rights in rem;
  • set-off;
  • reservation of title;
  • contracts relating to immovable property;
  • payment systems and financial markets;
  • employment;
  • patents and trade marks; and
  • detrimental acts.

In Poland, foreign creditors differ in practice in only one aspect with regard to insolvency and restructuring proceedings: they have longer time limits and deadlines for some legal actions, and they need to appoint a service agent in the Republic of Poland, unless they hire an attorney-at-law admitted to practise in Poland.

EU Regulation 2015/848 applies with regard to the recognition and enforcement of foreign judgments within EU countries.

With regard to other countries, recognition is granted when proceedings concern a case that does not belong to the exclusive jurisdiction of Polish courts, and when such recognition is not contrary to the basic rules of the legal order in the Republic of Poland (ordre public clause).

Insolvency Officers

In insolvency proceedings, the trustee is appointed by the court in the declaration of bankruptcy. At an earlier stage (proceedings to declare bankruptcy), the interim court supervisor is appointed; his or her main duty is to present a report showing the independent view on the situation of the debtor.

Restructuring Proceedings

Restructuring proceedings are conducted with the participation of the receiver or the supervisor – ie, the arrangement supervisor or the court supervisor.

After recent amendments, with regard to the biggest and most complex proceedings, the appointed officer should hold a qualified restructuring adviser’s licence.

Under Polish law, the supervisor or receiver can be a natural person who has full capacity for acts in law and holds a restructuring adviser licence, or a commercial partnership whose partners are liable for the partnership's obligations without limitation with all their assets or members of the management board representing a company or partnership that holds such licence.

The trustee and court supervisor are supervised by the judge-commissioner, but the creditors’ committee also has some powers (see 6.3 Roles of Creditors and 7.3 Organisation of Creditors or Committees).

Under Polish law, the supervisor or receiver may not be a natural person or a commercial company or partnership who/which is:

  • the debtor’s creditor or debtor;
  • a spouse, ascendant, descendant, sibling or relative by affinity of a debtor or his or her creditor in the same line or degree;
  • a person remaining in the adoption relationship with the debtor or a spouse of such person or a person remaining in an actual relationship and maintaining a common household with the debtor;
  • or was employed by the debtor under an employment relationship or was performing work or rendering services for the debtor under another legal relationship, save for performing the restructuring counselling acts for the debtor referred to in the Act on the Restructuring Counsellor Licence;
  • or was a member of an authority, a procurator or an attorney of a debtor, or is or was in the period of two years preceding the filing of a restructuring petition a debtor’s partner or shareholder holding shares in the amount exceeding 5% of the initial capital of a debtor or creditor; or
  • or was a company or partnership related to a debtor or is or was a member of an authority, a procurator or an attorney of such company or partnership or is or was in the period of two years preceding the filing of a restructuring petition a debtor’s partner or shareholder holding shares in the amount exceeding 5% of the initial capital of a company or partnership related to a debtor.

Similar restrictions apply to trustees, but they are regulated under the Bankruptcy Law.

Following a resolution of the creditors’ committee adopted by the committee in its full composition with no less than four members voting for the resolution, or following a resolution of the creditors’ committee adopted in accordance with a motion by the bankrupt entity, the court will replace the trustee and appoint to this function a person meeting the requirements and indicated by the creditors’ committee, save where this would be contrary to the law or drastically prejudicial to creditors' interests, or where there are justifiable grounds to believe that the person so indicated will not discharge his or her duties properly.

In the event of a flagrant failure or where no improvement in the discharge of duties of the trustee has occurred despite the administered fine, or in the event of default of the most important duties despite a summons to discharge the same within one week, the court will remove the trustee. Similar regulations apply to a court supervisor.

In Poland, the directors of the debtor company also have duties towards creditors, most of which require filing the bankruptcy petition (see 2.3 Obligation to Commence Formal Insolvency Proceedings).

The duties of directors are for the benefit of all creditors, but they may sometimes have a different legal basis. Directors may be held liable for pre-insolvency debts, but sometimes, according to Polish Supreme Court judgments, also for post-commencement debts if the bankruptcy petition was delayed.

Under Polish law, creditors are entitled to assert fiduciary breach claims directly against directors and officers.

Under Polish law, particular transactions (or broadly, acts in law) are by operation of law ineffective with respect to the bankruptcy estate or may be held ineffective with respect to the bankruptcy estate by the judge-commissioner’s decision. As a result, said transactions or acts in law are deemed within insolvency proceedings to never have occurred.

The judge-commissioner may challenge transactions with related parties and/or family members performed by the debtor within six months (for more dates, see 11.2 Look-Back Period) preceding the date of filing the bankruptcy petition, as well as any encumbrance of the bankrupt person’s assets with (among others) a mortgage or registered pledge, if the bankrupt person was not a personal debtor of the secured creditor and if the encumbrance was established within one year prior to the filing of the bankruptcy petition, and the bankrupt person did not receive any consideration for the establishment of such encumbrance.

The other party to such an ineffective transaction or act in law is obliged to contribute anything that has been transferred out of, or has not been contributed to, the bankruptcy estate as a result of such an ineffective act.

In certain cases, reciprocal consideration provided by the other party may be returned. If consideration cannot be returned, that party may assert its claims in bankruptcy proceedings on a par with other creditors.

On the other hand, the party who received the payment or the security may, by bringing an action, seek the recognition of such acts as being effective if they were unaware of the existence of the grounds for declaring bankruptcy at the time when such acts were performed.

Under Polish law, acts in law that may be challenged include those performed gratuitously (or at a significant undervalue) within one year before the filing of the bankruptcy petition, whereby the debtor disposed of his or her assets. The same applies respectively to court settlements, the admission of an action and the waiver of a claim.

Moreover securities and payments of an unenforceable debt given or made by the debtor within six months before filing the bankruptcy petition are ineffective with respect to the bankruptcy estate.

Under Polish law, most claims, as described in 11.1 Historical Transactions, may be set aside or deemed ineffective by operation of law.

In other circumstances, however, the trustee is entitled to demand that certain acts in law or transactions are held ineffective. The judge-commissioner has to power to decide this issue.

Setting aside or annulling a transaction may take place both in insolvency proceedings and in remedial proceedings – one of the restructuring options.

The trustee may also raise actio pauliana claims. Such proceedings are free from court fees.

Tatara & Partners Restructuring & Insolvency Law Firm

ul. Filipa Eisenberga 11/1,
31-523 Kraków
Poland

+48 12 634 52 92

+48 12 412 23 23

kancelaria@tatara.com.pl www.tatara.com.pl
Author Business Card

Trends and Developments


Authors



Tatara & Partners Restructuring & Insolvency Law Firm specialises in restructuring and insolvency law, with a particular focus on pre-packs and quick restructuring. It has offices in Kraków and Warsaw, and advises businesses facing financial difficulties as well as those optimising or developing their businesses. Clients include business owners, members of the management boards and supervisory boards. The team handles the most complicated and complex projects in Poland, and the lawyers' experience and deep understanding of business in general enable them to offer top-level legal services tailored to a client’s needs. The firm has successfully advised in many of the most innovative, precedential and high-value projects, including for well-known public companies that are listed on the main market of the Warsaw Stock Exchange. It conducted the very first pre-pack sale in Poland and has experience in various roles in every new proceeding introduced by the Restructuring Law.

The current trends and developments in the Polish insolvency market revolve mainly around simplified restructuring proceedings and the implementation of EU Directive 2019/1023.

EU Directive 2019/1023

The Directive is subject to implementation in Poland by mid-July 2022 (after the extension used by the Polish government). The main characteristics of the Directive include a different approach to the stay of enforcement and the time limit thereof, as well as a revision of the cross-class cram-down mechanism which to some extent already functions under the Polish Restructuring Law. Other noteworthy amendments relate to restructuring advisers, the position of secured creditors, restructuring proceedings for groups of companies, organisational changes in the judiciary system and early warning tools.

The COVID-19 pandemic has demonstrated the need to implement technical measures related to conducting creditors’ meetings by means of electronic communication rather than in person or via traditional mail, among other matters.

A governmental taskforce to draft legal acts aiming to implement the Directive is yet to be established in Poland, although some attempts and first steps have been made.

Professional organisations like the INSO Section of the Allerhand Institute and the National Chamber of Restructuring Advisers (KIDR) have actively supported the ongoing public debate relating to the Directive’s implementation.

Generally, there is a consensus in the professional milieu that insolvency and restructuring law in Poland needs to be revisited regardless of the need to amend it in order to implement the Directive. It is commonly agreed that the amendments should facilitate access to out-of-court proceedings such as simplified restructuring proceedings, or simplify existing types of restructuring proceedings. Some scholars and practitioners have also expressed the need to limit the number of such proceedings.

Therefore, a general suggestion is to simplify the restructuring proceedings and limit their number (there are currently four restructuring proceedings and one simplified restructuring proceeding) as soon as the opportunity to amend the law presents itself.

Simplified Restructuring Proceedings

The so-called simplified restructuring proceedings were introduced prior to the implementation of the Directive. Under Polish law, they are mostly out-of-court proceedings for now.

The idea of simplified restructuring focuses on the possibility of an entrepreneur enjoying the effects of the opening of restructuring proceedings only after making an announcement in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy). These effects include the stay of enforcement and the prohibition of terminating those operations that are necessary to carry on the business. Since these effects are very beneficial for the debtor, the legislator has also introduced a tool for creditors – namely, a petition to cancel the effects of making the announcement, which may be granted by the restructuring court. However, data shows that this tool is not frequently used.

It is believed that simplified restructuring may be a model for implementing the Directive; research into this is currently being conducted. One thing is for sure: simplified restructuring proceedings are the most popular restructuring proceedings, accounting for 90% of all restructuring proceedings in Poland (according to Reports on Simplified Restructuring published on INSOL Europe’s website: www.insol-europe.org). These proceedings are also the quickest in the insolvency and restructuring framework, because the arrangement must be concluded within four months of the commencement of proceedings, during which time the petition to approve the arrangement should be filed with the court. This presents an obstacle, however, because restructuring courts in Poland are currently jammed with cases and are consequently slow to examine them. In the meantime, the stay of enforcement continues, unless the cancellation of the effects of opening the proceedings has been issued by the court.

Simplified restructurings were originally intended to remain in force only until 30 June 2021, later extended until 30 November 2021. However, their popularity among distressed entrepreneurs led the Polish legislator to decide to retain them for an indefinite period of time. This latest implementation will bring about other amendments in the proceedings, as follows:

  • the announcement on the opening of the proceedings to approve the arrangement will be made by the arrangement supervisor, not by the debtor himself or herself;
  • the announcement may be made only after the debtor has submitted the list of receivables and the list of disputed receivables;
  • the arrangement supervisor will list the agreements that are essential for the functioning of the debtor’s enterprise so as to prevent its termination;
  • the court’s decision on the cancellation of the effects of making the announcement may be appealed; and
  • the case files will be kept by the arrangement supervisor.

These amendments, mainly changing the proceedings to approve the arrangement, are to enter into force on 1 December 2021.

In more than a year of functioning, simplified restructuring proceedings have been resorted to by more than 1,600 entrepreneurs, while other restructuring proceedings in the same period were applied for 450 times (even taking into account that there are four other restructuring proceedings to choose from: proceedings to approve the arrangement; accelerated arrangement proceedings; arrangement proceedings; and remedial proceedings).

Informatisation and Digitalisation of Proceedings

The growing number of restructurings and consumer bankruptcy proceedings has overwhelmed the courts while the insolvency registry is still in the pipeline.

However, the National Debtors’ Registry (Krajowy Rejestr Zadłużonych) is set to enter into force at last on 1 December 2021. This registry will make proceedings much more transparent and easier to follow, because all important information regarding the proceedings will be available online in one place.

The National Debtors’ Registry will allow any stakeholder in bankruptcy and restructuring proceedings to obtain information about the relevant proceedings and their current status, and also to access the documents relating to the proceedings. The Registry is expected to introduce a brand new quality for carrying on proceedings if it functions as planned. Currently, Polish lawyers specialising in restructuring and insolvency law (ie, attorneys-at-law and trustees) frequently have to visit court in person, despite the pandemic circumstances and all the restrictions in place, sometimes just to take photos of case files, in order to be up-to-date. After the Registry is introduced, it will be possible to verify the status of proceedings from a computer, and the documents filed under the proceedings will be available electronically with just a few clicks.

In Poland, the anti-crisis shield 4.0 introduced the digitalisation of proceedings and the regulations regarding simplified restructuring proceedings. According to Article 19.3, if it is technically possible, voting during the creditors’ meeting may be conducted through the use of electronic means of communication. This particularly includes transmission of the creditors’ meeting in real time, when the creditors may speak during the meeting while present at a location other than that where the creditors’ meeting is held. The creditors’ participation in the meeting may only be subject to such requirements and restrictions as are necessary to identify the creditors and ensure the safety of electronic communication.

The COVID-19 pandemic can be said to have accelerated these changes, and it is hoped that this trend will continue.

Organisational Changes in the Judiciary

During an informal debate regarding possible amendments to insolvency and restructuring law, the government did not say “no” to the proposed organisational changes in the judiciary system. Since the introduction of the Restructuring Law in 2015, several experts and professional organisations have called for a radical yet well-justified change in the organisation of the restructuring-related judiciary.

The change should focus on transferring complex restructuring cases to higher level courts, while leaving consumer bankruptcy cases on the level of district courts.

This should make judgments in restructuring cases more homogenous and create a clear promotion path for experienced judges, who will continue to decide bankruptcy and restructuring cases. If the regional courts also decide restructuring cases, the best judges will not face a dilemma over whether they should stay at the district court or accept promotion to the regional court, not knowing what type of cases they will get to decide on a day-to-day basis.

Professionalisation of Restructuring Advisers

Due to the rapidly growing number of restructuring proceedings, especially consumer bankruptcy cases, there is a need to professionalise the functioning of restructuring advisers. A trustee can no longer handle a case by themselves, because the latest amendment to the Bankruptcy Law states that all bankruptcy case files will be kept by the restructuring adviser acting as the trustee (administrator, receiver).

Moreover, the restructuring adviser now has to be able to show the case files to all parties that are interested in the proceedings, and the law clearly states that the creditors must send their claims to the restructuring adviser’s office.

The professionalisation of restructuring advisers will entail a duty for restructuring advisers to have an office and one contact address where the parties may gain access to case files and where creditors can lodge claims. The digitalisation of proceedings will only enhance this trend, because it will be practically impossible for the restructuring adviser to personally handle  all aspects of the proceedings and cases. Thus, restructuring advisers will most probably have to hire staff to run such an office and obtain good digital and telecommunication tools, which are required by the forthcoming changes in the law.

To promote the highest standards and constant development, there is a need to create a centralised self-government of restructuring advisers, like the bar of advocates or attorneys-at-law. Participation in such self-government structures is currently not mandatory for restructuring advisers.

The EU Restructuring Directive requires constant professional development of restructuring advisers. This issue has to be taken into consideration when implementing the Directive into the Polish legal framework.

Summing up, it seems that good and interesting times are ahead of us.

Tatara & Partners Restructuring & Insolvency Law Firm

ul. Filipa Eisenberga 11/1,
31-523 Kraków
Poland

+48 12 634 52 92

+48 12 412 23 23

kancelaria@tatara.com.pl www.tatara.com.pl
Author Business Card

Law and Practice

Authors



Tatara & Partners Restructuring & Insolvency Law Firm specialises in restructuring and insolvency law, with a particular focus on pre-packs and quick restructuring. It has offices in Kraków and Warsaw, and advises businesses facing financial difficulties as well as those optimising or developing their businesses. Clients include business owners, members of management boards and supervisory boards. The team handles the most complicated and complex projects in Poland, and the lawyers' experience and deep understanding of business in general enable them to offer top-level legal services tailored to a client’s needs. The firm has successfully advised in many of the most innovative, precedential and high-value projects, including for well-known public companies that are listed on the main market of the Warsaw Stock Exchange. It conducted the very first pre-pack sale in Poland and has experience in various roles in every new proceeding introduced by the Restructuring Law.

Trends and Development

Authors



Tatara & Partners Restructuring & Insolvency Law Firm specialises in restructuring and insolvency law, with a particular focus on pre-packs and quick restructuring. It has offices in Kraków and Warsaw, and advises businesses facing financial difficulties as well as those optimising or developing their businesses. Clients include business owners, members of the management boards and supervisory boards. The team handles the most complicated and complex projects in Poland, and the lawyers' experience and deep understanding of business in general enable them to offer top-level legal services tailored to a client’s needs. The firm has successfully advised in many of the most innovative, precedential and high-value projects, including for well-known public companies that are listed on the main market of the Warsaw Stock Exchange. It conducted the very first pre-pack sale in Poland and has experience in various roles in every new proceeding introduced by the Restructuring Law.

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