Fakty Komentarze Analiza (Facts Comments Analysis) | New rules for the restructuring of debtors

What’s new in law, and what should you be aware of?

Facts

Polish law does not provide a modern regulation on the rules for the restructuring of debtors, whereas the number of bankruptcies involving the liquidation of debtors’ assets exceeds the number of restructuring proceedings. This situation should change once the new restructuring law comes into effect on 1 June 2015. 

Comments

The currently binding Bankruptcy and Rehabilitation Law does not specify the rules with respect to the restructuring of a debtor’s business.

Problems include the high degree of formality of procedures, the lack of Internet tools and the absence of regulations on out-of-court restructuring on the basis of contracts with groups of creditors. The bill implements mechanisms aimed at making the restructuring procedure less formal and more up-to-date, which is a benefit from the point of view of both the debtor and creditors.

Analysis

The restructuring law introduces four new procedures: proceedings to approve an arrangement, accelerated arrangement proceedings, arrangement proceedings and recovery proceedings. The choice of proceeding depends on the state and financial condition of the debtor.

If you need tailored advice please contact:

Leszek Rydzewski - partner, dr Aleksandra Pokropek - senior associate in the financial institutions and financial restructuring department.