Support during the Corona pandemic
In Poland, insolvency proceedings were simplified a few weeks ago due to the corona pandemic. At the beginning of June, the lower chamber of parliament, the Sejm, passed a law to facilitate insolvency proceedings for companies during the Covid 19 pandemic.
Since the beginning of the pandemic, the Polish parliament has already passed three legislative packages to mitigate the consequences of the crisis. These so-called anti-crisis shields focus mainly on the areas of labour, tax and commercial law. So now another shield has been added for insolvency law.
Simplified restructuring procedure
A major feature of the law is the provisions for a simplified restructuring procedure. This is intended to enable an entrepreneur to organise the restructuring procedure through a court if necessary, with only minor involvement. It is not necessary to prove the connection of the debtor’s insolvency with the Corona pandemic.
Even for the initiation of proceedings, the approval of the restructuring court is not required. For this purpose, a contract with a restructuring consultant and the publication of the opening of proceedings in an official gazette is sufficient. In the case of the simplified restructuring procedure, this announcement must be made by June 30, 2021.
Debtor protection until end of the process
The publication protects the debtor against the enforcement of payment claims by the creditor. This protection applies until the end of the proceedings. Up to now, creditor protection only came into force with a court decision on the opening of proceedings. If the current rules are complied with, the creditor is currently not threatened with a penalty for delaying insolvency. Due to the pandemic, various regulations on time limits have been changed here.
The court will only become active at the end of the simplified restructuring procedure. Then it should accept the settlement reached between the debtor and the creditor. Such a settlement is like the German insolvency plan. The court will also act if the creditor is threatened with damage as a result of the proceedings.
State aid for restructuring
The law introducing the simplified restructuring procedure is accompanied by a law on subsidies. It concerns state aid for planning and restructuring.
There will be three different types of support. Some of these provide for loans with different maturities. This is intended to enable a company threatened or affected by insolvency to draw up a restructuring plan. This will allow debtors and creditors to negotiate with each other in peace.
The implementation of the restructuring plan is also to be supported by state subsidies. Some of this support runs for a longer period.