An insolvent debtor (or one threatened with insolvency) who is an entrepreneur may avoid declaring bankruptcy by concluding an arrangement with his creditors as part of the restructuring procedure. The Restructuring Law Act (Journal of Laws of 2020, item 814) provides for 4 separate types of such proceedings:
- proceedings for approval of the arrangement;
- accelerated arrangement proceedings;
- composition proceedings;
- restructuring proceedings.
Each of them is characterized by different attributes that determine what procedure will be most beneficial for a given entrepreneur (depending on the degree and form of his financial problems). It should be remembered that the purpose of all the above-mentioned restructuring proceedings is to conclude an arrangement with the debtor's creditors, which usually provides for partial cancellation of his debts.
I. Proceedings for approval of the arrangement
The arrangement approval procedure is definitely the least complicated restructuring procedure. The legal norms regulating this procedure mean that it should end with a faster - compared to other types of restructuring proceedings - acceptance of the arrangement. It consists of the debtor freely choosing the person of the arrangement supervisor (usually by concluding an agreement with a restructuring advisor), who collects the votes of creditors who are "for" or "against" the arrangement. The arrangement is accepted if the majority of creditors, having a total of at least two thirds of the sum of receivables entitling them to vote, vote "for" the arrangement (the number of votes necessary to adopt the arrangement is the same in each type of procedure). Then, the Court should issue a decision on its approval within two weeks of filing the application for approval of the arrangement.
It is worth noting that the biggest disadvantage of this type of procedure was the lack of suspension of enforcement proceedings conducted against the debtor. This defect changed on December 1, 2021, when the amended procedure for approval of the arrangement was included in the provisions of the Restructuring Law. It was inspired by the provisions of the original procedure for approval of the arrangement (2016 - 2020) and solutions taken from the simplified restructuring procedure operating in the period 2020-2021 based on "Shield 4.0". In accordance with the currently applicable regulations, enforcement proceedings cannot be initiated against a debtor who has announced in the MSiG information about the opening of proceedings for approval of the arrangement against him, and the initiated enforcement proceedings are suspended by operation of law. As of this date, the debtor is also fully protected against the termination of key contracts by contractors (including lease, leasing, commercial contracts, credit agreements). The aim of the proceedings is to conclude an arrangement as soon as possible and for the supervisor to submit an application for its approval by the court.
II. Accelerated composition proceedings
Accelerated arrangement proceedings may be conducted if the sum of disputed receivables does not exceed 15% of the sum of receivables entitling to vote on the arrangement. This procedure differs from the "ordinary" arrangement proceedings mainly in the simplified procedure of drawing up a list of receivables by the Court Supervisor and its approval by the Judge Commissioner. Basically, this simplification comes down to preventing creditors from filing objections to the inclusion of their receivables on the list of receivables.
III. Arrangement proceedings
Arrangement proceedings (similarly to accelerated arrangement proceedings) may be conducted if the sum of disputed receivables exceeds 15% of the sum of receivables entitling to vote on the arrangement. Apart from that, the legal instruments used within this form of restructuring are almost identical to those used within the Accelerated Arrangement Proceedings.
IV. Sanation proceedings
Restructuring proceedings are certainly the most far-reaching type of proceedings in terms of the number of legal instruments that can be used in the course of restructuring. The legislator has provided that the right to dispose of these instruments will mainly be in the hands of the administrator of the restructurization estate, whose task is to undertake activities consisting in "recovering" the enterprise. However, this does not always mean that the debtor is deprived of their own management of the enterprise (very often courts allow debtors to exercise ordinary management of part or all of the enterprise). The administrator performs a similar function in these proceedings to the court supervisor in other types of restructuring, with the proviso that the scope of activities that they can undertake is much wider.
V. Summary The selection of the appropriate type of proceedings for the debtor should be preceded by a thorough analysis of the economic situation of the company. In such an analysis, the debtor should take into account in particular whether there are any enforcement proceedings conducted against him, which of his receivables are disputed and what percentage of the debtor's total liabilities they constitute. The mere seizure of a bank account by a bailiff can significantly hinder the conduct of business activity. In order to select the appropriate procedure, we recommend using the assistance of lawyers from the HP Law Firm specializing in the field of restructuring law.
English 
Polish 
Ukrainian 
German