Restructuring
Restructuring is an effective legal tool enabling companies to overcome the risk of insolvency and loss of financial liquidity, allowing the enterprise to be preserved and restored to operational stability.
The restructuring process consists in implementing corrective measures — both financial and organisational — which make it possible to stabilise the situation of an enterprise, conclude an arrangement with creditors and gradually restore financial stability. Through properly conducted restructuring measures, it is possible to preserve jobs, continue the company’s operations and protect the value of its assets.
What are restructuring proceedings?
The essence of out‑of‑court or court restructuring proceedings is to provide a comprehensive solution to the financial difficulties of an enterprise. This means preparing a reliable action framework referred to as a restructuring plan.
Restructuring proceedings suspend enforcement actions (the so‑called enforcement moratorium) in order to provide the company with time to implement solutions developed jointly with a restructuring advisor and included in the restructuring plan in a stable and controlled manner. During the course of the proceedings, it is also possible to secure agreements that are essential for the functioning of the enterprise, including lease agreements, against termination.
The proceedings as a whole are intended to create conditions enabling the entrepreneur to effectively implement restructuring measures, rescue the company and subsequently restore its operational strength.
From a strictly legal perspective, restructuring proceedings constitute an organised set of actions based on procedural legal relationships undertaken by the bodies of the restructuring proceedings — both judicial and out‑of‑court — with the participation of interested parties. Their purpose is to protect both social and individual interests, primarily by seeking to avoid the declaration of the debtor’s bankruptcy through enabling restructuring by way of concluding an arrangement with creditors.
In the case of sanation proceedings, the objective additionally includes the implementation of sanation measures aimed at restoring the debtor’s ability to perform its obligations. At the same time, these proceedings are intended to ensure protection of the legitimate rights of creditors through the application of appropriate legal provisions in a given factual situation.
By their nature, restructuring proceedings are collective in character. Pursuant to Article 65(1) of the Polish Restructuring Law, the participants in restructuring proceedings include:
- the debtor,
- a personal creditor of the debtor holding a non‑disputed claim,
- a personal creditor of the debtor whose claim is disputed, provided that the existence of such claim has been substantiated and the creditor has been admitted to participate in the proceedings by the judge‑commissioner.
In practice, this means that restructuring constitutes an instrument enabling an entrepreneur to organise its financial situation, continue business operations, and reach an agreement with creditors in a controlled manner and in compliance with applicable legal provisions. As a result, it becomes possible to avoid bankruptcy while simultaneously safeguarding the interests of all participants in the proceedings.
Since when have these legal solutions been available?
On 1 January 2016, the Restructuring Law Act entered into force, significantly changing the legal situation of entrepreneurs who are insolvent or threatened with insolvency, as well as that of their creditors. The Act introduced new mechanisms and legal solutions enabling entrepreneurs to respond more effectively to financial distress.
It is worth emphasising that Centrum Restrukturyzacji i Upadłości Sp. z o.o., as the first entity within the RBBC law firm structure, commenced its operations in the same year — precisely on 27 December 2016. We have been supporting our clients for a decade and, since the very beginning of the application of the Restructuring Law, we have been actively engaged in its practical implementation in the day‑to‑day functioning of enterprises.
We continue to develop together with all legislative amendments and regulatory changes in order to provide assistance and advisory services in a fully informed, reliable and comprehensive manner.
We conduct a financial analysis of the enterprise, assess the feasibility of implementing restructuring and corrective measures, and evaluate the prospects for successfully concluding an arrangement with creditors. We examine the scope of liability of management board members and provide comprehensive assistance in resolving the company’s crisis situation through the preparation of a reliable and comprehensive action plan.
We support both indebted companies threatened with insolvency as well as creditors, providing representation in both court and out‑of‑court restructuring proceedings.
Qualified and licensed restructuring advisors carry out an analysis of the financial and organisational situation of the enterprise. Subsequently, depending on the circumstances identified, they prepare an action plan, i.e. a preliminary restructuring plan, and select the most appropriate type of restructuring proceedings.
Polish restructuring law provides for four independent restructuring procedures: arrangement approval proceedings, accelerated arrangement proceedings, arrangement proceedings, sanation proceedings.
Their common feature is that all of them aim at concluding an arrangement with creditors and avoiding the debtor’s bankruptcy. However, they differ in the degree of court involvement, the level of protection against enforcement, the scope of limitations in the management of assets, and whether their primary purpose is the conclusion of an arrangement or also a comprehensive operational restructuring of the enterprise.
Would you like to open restructuring proceedings?
Proceedings conducted with qualified and licensed restructuring advisors
For more than a decade, we have been supporting entrepreneurs in conducting restructuring proceedings. We provide comprehensive and effective legal assistance, ensuring the efficient course of the proceedings and the legal security of the entire process.
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When should restructuring be considered?
Restructuring should be considered when a company begins to experience difficulties in the timely repayment of its liabilities, arrears towards contractors, the Social Insurance Institution (ZUS) or the tax authorities begin to arise, and at the same time the enterprise still has the potential to continue its operations.
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Does restructuring suspend enforcement proceedings conducted by a bailiff?
Yes. Restructuring proceedings allow enforcement actions to be suspended and provide the company with time to implement corrective measures.
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Can a company continue to operate during restructuring proceedings?
Yes. One of the main objectives of restructuring is to maintain business operations and create conditions enabling the continued functioning of the enterprise.
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What documents are required to open restructuring proceedings?
All required documents can be found at the link provided.
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How quickly can arrangement approval proceedings (Arrangement Approval Proceedings – Polish acronym: PZU) be opened?
In real time.
Due to the fact that the National Register of Debtors (KRZ) — the online portal in which restructuring and bankruptcy proceedings are conducted — operates as an electronic system, the proceedings are opened upon uploading the required documents and publishing the announcement in this system. -
How long does the economic and financial analysis and preparation of documents required to open the proceedings take?
In the case of micro‑enterprises whose annual revenues do not exceed PLN 1 million, the analysis usually takes from several days up to one week.
In the case of larger entities, the process may take approximately one week, and in more complex matters — in particular where liabilities exceed several tens of millions PLN or where cross‑border elements are involved — up to approximately two weeks, and exceptionally up to approximately one month.
The above timeframes are calculated from the moment the complete set of required documents has been provided.
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What is the cost of arrangement approval proceedings (Arrangement Approval Proceedings – Polish acronym: PZU)?
The cost of conducting arrangement approval proceedings starts from PLN 15,000 net in the case of enterprises with a relatively simple debt structure (up to 10 creditors and liabilities up to approximately PLN 500,000).
The above amount does not include the cost of a possible asset valuation prepared by a certified valuation expert, if such valuation proves necessary. The cost of such valuation starts from PLN 2,000 net.
In the case of more complex proceedings — in particular involving a larger number of creditors or a higher value of liabilities — the remuneration is determined individually, taking into account the complexity of the case and the scope of the required activities.
The cost of a restructuring consultation together with a preliminary assessment of the situation and a simulation of the probability of concluding an arrangement amounts to PLN 1,000 net.
Conducting such an analysis requires prior submission of documentation and approximately 3 business days for its preparation — therefore, we recommend sending the documents at least 3 days in advance of the planned meeting.