New insolvency and restructuring law in Poland

A. Changes in insolvency law

On 1 January 2016, an amendment entered into force
of the Act of 28 February 2003 – Insolvency and Rescue Law, renaming it
Insolvency Law, and introducing a number of other modifications, such
as:

• a new definition of insolvency – a debtor is deemed insolvent when
  it has lost the ability to settle its due and payable cash liabilities;
• presumption of insolvency – a) if the default in settling cash
  liabilities is longer than three months, b) in the case of legal persons
  and legal persons without corporate status, if the value of cash
  liabilities is higher than the value of the assets of a given entity,
  and this state continues for more than two years (24 months);
• introduction of a single type of insolvency (no distinction between
  insolvency including the liquidation of the debtor’s assets and
  insolvency open to composition agreements – although it is still
  possible to conclude a composition agreement);
• determining the persons obligated to file a declaration of
  insolvency (i. e. all persons who, pursuant to the law, the bylaws or
  the articles of association, are entitled to manage the debtor’s
  business affairs and to represent it, individually or jointly with other
  persons);
• the liability for damages of the person obligated to file a
  declaration of insolvency on the basis of alleged guilt, limited in case
  of creditors to the amount of receivables due and payable to the
  creditor from the debtor;
• the term for filing a declaration of insolvency has been prolonged from 14 to 30 days;
• the jurisdiction of the insolvency court shall be established according to “the centre of main interests of the debtor”;
• the possibility of selling the enterprise through the so-called
  pre-pack liquidation after the court has approved the conditions of sale
  of the debtor’s enterprise, of its organized part, or of assets
  constituting a substantial part of the enterprise.

B. Restructuring law

Entrepreneurs at risk of insolvency have at their
disposal, as of 1 January 2016, new forms of rescue proceedings,
conducted pursuant to Act of 15 May 2015 – Restructuring Law.

The aim of restructuring proceedings is to avoid declaring insolvency
by making it possible for the debtor to restructure through a
composition agreement with creditors, and in case of recovery
proceedings, also through recovery actions, protecting the creditors’
legitimate rights. The following types of proceedings are distinguished:

• composition approval proceedings;
• accelerated composition proceedings;
• composition proceedings;
• recovery proceedings.

Where insolvency proceedings concur with restructuring proceedings,
priority is given to the request to open restructuring proceedings, and
the insolvency court suspends the examination of the declaration of
insolvency until the restructuring proceedings are finished.

Requests to open restructuring proceedings are examined by
restructuring courts, i. e. by district courts – commercial courts with
jurisdiction over the centre of main interests of the debtor.

A licensed insolvency practitioner participates in the proceedings as a supervisor or receiver.

Unless a receiver has been appointed, the debtor remains in control
of the assets. Opening restructuring proceedings does not influence the
debtor’s legal capacity or its capacity to perform acts in law. After
the court decides to open restructuring proceedings, the entrepreneur
continues to operate under the same business name, with the indication
“restructuring” added.

In 2018, a Central Registry of Restructuring and Insolvency is to be
created, which will include, among other things, a search engine of
insolvency cases.