POLAND Law and Practice Contributed by: Karol Tatara, Paweł Kuglarz, Anna Czarnota and Mateusz Kaliński, Tatara & Partners Restructuring & Insolvency Law Firm
4.2 Statutory Restructuring, Rehabilitation and Reorganisation Procedure Overview Polish law offers a number of proceedings for busi - nesses and individuals in distress. They span business insolvency proceedings, consumer bankruptcy as well as four restructuring proceedings. These solutions aid debtors and also create opportu - nities or risks for creditors. As a rule, opportunities will arise for active creditors. Restructuring proceedings fall into the following four categories: • arrangement approval proceedings, including a version with an announcement in the National Debtors Register ( Krajowy Rejestr Zadłużonych , KRZ) and a more private one, without an announcement; • arrangement proceedings accelerated; • arrangement proceedings; and • remedial proceedings. With regard to insolvency proceedings, in Poland there is a regular insolvency proceeding, regulated within the Bankruptcy Law, as well as a consumer bankruptcy, which can sometimes be a useful tool for over-indebted former entrepreneurs or members of management boards. Within insolvency proceedings, an application for arrangement in bankruptcy may be filed and in this case, some relevant provisions of the Restructuring Law apply. Corporate insolvency proceedings may be accompa - nied by a pre-pack sale application. Third-party release is admissible providing the arrangement does not affect such rights, beyond a certain extent, and provided that the object of the release belongs to the third party. With regard to arbitration, current Polish law does not provide for the possibility to arbitrate insolvency or restructuring cases; however, it is possible to use ADR for cases involving insolvency or restructuring.
– the committee usually has the right to receive finan - cial and other information on the current and ongoing business situation of the debtor, followed by inspec - tion of the books. Sometimes in restructuring agreements, new money and new security are granted. The provisions for not meeting the standards described in the agreement and possible creditors’ rights in such cases apply. Polish law does not provide for the possibility to con - duct out-of-court financial restructuring proceedings with dissenting parties. Mechanisms like cross-class cram-downs or divi - sion into groups of creditors are available under the Restructuring Law and are frequently used in formal restructuring proceedings. 3.2 Legal Status Out-of-court restructuring is mainly binding between the parties involved. 4. Statutory Restructuring, Rehabilitation and Reorganisation Proceedings 4.1 Opening of Statutory Restructuring, Rehabilitation and Reorganisation In Poland, it is not mandatory to initiate statutory restructuring proceedings, however, the approval of an arrangement can release directors and officers (board members) from additional liability connected with the non-enforcement of claims against the com - pany where they sit on the board. For restructuring, the proceedings can be initiated by the debtor, with one exception – a remedial proceed - ing, which can be initiated by the creditor, when the creditor is related to the insolvent legal person (limited liability company, simplified joint stock company or joint stock company).
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