Data on insolvency and restructuring from the first quarter of 2020 compared to the same period last year show a stabilisation in the number of restructuring proceedings and a slight increase in the number of insolvency proceedings, both among companies and consumers.
Bankruptcies and Restructuring – summary of the first quarter of 2020.
2 min.
22 April 2020
Bankruptcies and Restructuring – summary of the first quarter of 2020.
2 min.
22 April 2020
Data on insolvency and restructuring from the first quarter of 2020 compared to the same period last year show a stabilisation in the number of restructuring proceedings and a slight increase in the number of insolvency proceedings, both among companies and consumers.
The number of restructurings remained exactly the same in both 2019 and 2020, with 124 new proceedings opened. The number of company bankruptcies increased, with 188 companies declaring bankruptcy, 15 more than in the first quarter of 2019. The number of consumer bankruptcies increased the most, with 162 more than in the comparable period last year (Source: Central Economic Information Centre).
However, it should be added that these data are not relevant to the actual insolvency rates among both companies and, above all, consumers. This is due to the mode of operation of the courts resulting from the state of epidemic threat (since 14 March) and then the state of epidemic (since 20 March). The courts only ruled on urgent cases, so the number of decisions in March is certainly lower than the number of applications filed that could potentially result in bankruptcy or restructuring.
Furthermore, these data do not yet reflect the impact of the Covid-19 pandemic on the economic situation in Poland. In view of this, it is to be expected that the number of bankruptcies and restructurings will increase in the coming months. According to Coface for trade, in 2020 ‘the Polish economy will contract by 3.5 per cent, and the number of bankruptcies and restructurings of companies will increase to a level similar to that recorded during the last major crisis in 2009, when the number of insolvencies increased by 68 per cent.’ (Source: Coface for trade).
In addition, the increase in the number of consumer bankruptcies will be influenced by the change in bankruptcy regulations, which came into force on 24 March 2020.
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