Shield 4.0: Simplified restructuring procedure
The last of the laws under the so-called The new type of restructuring procedure was introduced by the anti-crisis shield and introduced the possibility for entrepreneurs to conduct a new, formalized type of restructuring procedure. The simplified restructuring procedure is intended to facilitate and speed up the restructuring process for businesses that are insolvent or threatened with insolvency – whether or not this is due to the COVID epidemic – 19.
The application of the new restructuring procedure is limited in time – each entrepreneur can only start such a procedure once, until the end of June 2021.
What are the benefits of a simplified restructuring procedure?
Speed of procedure
The initiation of the simplified restructuring procedure shall take place without the participation of the court. The entrepreneur only has to sign an agreement with a restructuring advisor (supervisor of the arrangement), prepare arrangement proposals and a list of receivables, and then make a notice of the opening of the procedure for the approval of the arrangement in Monitor Sądowy i Gospodarczy. From the moment of the announcement, he enjoys the protection associated with the initiation of proceedings.
The supervisor of the agreement shall inform the court competent for the approval of the agreement about the submitted announcement.
Since the announcement, the entrepreneur has 4 months to submit an application to the court for approval of the arrangement. Otherwise, the proceedings will be discontinued by law.
Remote creditors’ meeting
In order to streamline the process of voting on the arrangement, voting at the creditors’ meeting will be able to take place using electronic means of communication (e. g. in the form of a teleconference).
The participation of creditors in the meeting may be subject only to such requirements and restrictions as are necessary to identify creditors and ensure the security of electronic communication.
Creditors’ votes can still be collected by correspondence.
Protection against execution
From the date of the announcement of the opening of proceedings to the date of discontinuance or completion of the proceedings for the approval of the arrangement, the possibility of conducting enforcement proceedings with regard to the receivables covered by the arrangement is limited:
- enforcement proceedings concerning the agreement claim are suspended by law,
- enforcement proceedings concerning the agreement claim cannot be initiated,
- the order to secure the claim or to order the securing of the claim resulting from the agreement claim cannot be executed.
Simplified restructuring procedure, therefore, gives the entrepreneur the opportunity to protect himself against creditors’ actions from the moment of the announcement of the opening of the procedure.
Additionally, the possibility of terminating some of the contracts concluded with the entrepreneur, e.g. a credit or a bank account.
However, in order to prevent the possibility of opening a simplified restructuring in order to harm creditors, the legislator granted creditors (as well as third parties) a claim for damages where the debtor initiated proceedings in bad faith.
Scope of claims covered by the arrangement
In addition to the receivables covered by the arrangement by operation of law, receivables secured in kind are also included in the arrangement without the consent of the creditor if the arrangement proposal provides for their full satisfaction within the time limit specified in the arrangement, together with any incidental receivables that were provided for in the agreement that was the basis for establishing the security (even if the agreement has been effectively terminated or expired), or for their satisfaction to an extent not lower than that which could be expected in the event of recovery of the receivables together with incidental receivables from the object of the security.
Exemption from personal liability of board members
If there is a timely announcement of the opening of the proceedings for the approval of the arrangement, or as a result of the arrangement, to the opening of the cure proceedings or to the filing of a simplified petition for the declaration of bankruptcy, the members of the management board will not be liable for any damage caused as a result of the untimely filing of the petition for the declaration of bankruptcy, the company’s liabilities in the event of ineffective enforcement (in the case of a limited liability company). and tax arrears.
If no approval of the arrangement has been reached, the same scope of protection will apply if, within 7 days of discontinuing the proceedings, the board members file a bankruptcy petition or an application to open restructuring proceedings and such proceedings are opened.
At the same time, it should be remembered that the 30-day deadline for filing a bankruptcy petition remains suspended for the duration of the epidemic and epidemiological threat.
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