Bankruptcy in Poland (Insolvency in Poland)
If your Polish debtor declared bankruptcy, you must submit your claim before a Polish bankruptcy court, if you fail to do this, you will lose the possibility of recovery in the future.
Issues related to reporting a claim in bankruptcy of a Polish company (entrepreneur) are regulated by the Polish Bankruptcy and Reorganisation Law of 28 February 2003.
Polish bankruptcy court issuing the decision on bankruptcy of the company calls the creditors to lodge the claims within the prescribed period, not shorter than one month and not longer than three months.
If you have not received the call, contact us immediately.
Submission of claims in the Polish bankruptcy proceedings is considered as a form of debt recovery provided by the law. Failure to report the claim results in loss of the possibilities to satisfy it from bankruptcy assets. Each creditor must report the claim to the Polish bankruptcy court. Only creditors who’s claims are secured on the assets of the bankrupt (by lien, pledge or mortgage) will be placed on the list automaticaly – ex offcio. However, it is almost a rule that they also submit their claims to the bankruptcy court, not to lose their opportunity to recover the debt.
Submission of claims should be regarded as a form of pursing it under court proceedings, and the approval of the list of claims – as the decision (court judgement). Submitting of claim interrupts the limitation period of the claim.
The claim should be made in writing in two copies. Unfortunately, the Polish law is very formalized and poses a number of specific requirements. Fulfilment of the legal requirement is frequently very complicated. Lodgement of the claim not meeting with requirements will be rejected by the court and will not have any legal effect.
Generally, the lodgement may be also made after expiry of the submitions period. The court will require the creditor to cover additional costs resulting from the late submission regardless of the reason of delay. These additional costs include in particular the costs of taking evidence, the costs of notices, the costs of the appeal. However, if the lodgement occurs after approval of the final plan of the division of the bankruptcy funds, the claim will be rejected. (Article 252 paragraph 2, bankruptcy and reorganisation law).
If you are informed that your Polish debtor can be declared bankrupt, please contact us to check, and if that is the case we will file the claim before bankruptcy court.
The remedial proceedings is the type of restructuring proceedings, which are regulated in Act of 15 May 2015 – Restructuring Law. This type of procedure allows protecting interests of both creditors and debtor. The creditors are able to collect their receivables, while the debtor is allowed to conduct its business activity. This type of procedure is applicable when there are chances to avoid bankruptcy and then liquidation proceedings with regard to debtor. However, the provisions of abovementioned Act strictly regulate the procedure.
Remedial actions shall include legal and factual actions, which aim to improve the economic situation of debtor and restore its capacity to perform obligations and simultaneously protect it against enforcement proceedings.
Motion for opening remedial proceedings
Motion should be filled directly to Commercial Division of appropriate court. After examining the motion, court issues decision on opening remedial proceedings in which debtor is deprived of self-administration of its estate. Simultaneously, the court appoints the administrator. However, if the debtor or its representatives provide guarantee of proper performance the administration over the estate, the court may allow them to manage over the part or even whole administration, which does not exceed the daily management activities.
Preparation and performance of restructuration plan
The administrator is obliged to provide the judge-commissioner with creditors list within 30 days since the opening of remedial proceedings. In the same term the administrator have to present the restructuration plan. Such plan should be drafted in cooperation with debtor. In some justified cases, the 30-days term can be lengthened up to three months by judge-commissioner. If the administrator and debtor cannot reach an agreement with regard to restructuration plan, the administrator shall submit the plan with attached debtor’s reservations. Then, judge-commissioner examines the plan and after assessment of Creditors Committee issues decision on approval the restructuration plan. However, the judge-commissioner can also issue an injunction against some specified actions indicated in plan and order the implementation of other steps dictated by the purposes of remedial proceedings and interests of creditors and third parties which are not included in remedial proceedings.
Main consequences of opening remedial proceedings
Apart of the above, the main feature of opening remedial proceedings as such, is that debtor is deprived of the management on its entire property. Debtor is obliged to provide to judge-commissioner and appointed administrator all the explanations concerning its previous business activities. Moreover, opening remedial proceedings invalidates all authorizations previously granted by debtor to its commercial proxies. The appointed administrator (upon the consent of judge-commissioner) is entitled to cancel all the agreements, which have not been performed as a whole or partially before opening remedial proceedings.
Nevertheless, it should be noted that despite of opening the remedial proceedings, the creditor is allowed to pursue the claims in separate procedures e.g. arbitration).
If you are informed that your Polish debtor was covered by remedial proceedings, please contact our lawyers to check if that is the case we will file the claim on the creditors list and then secure your receivables in remedial proceedings.