POLAND Law and Practice Contributed by: Karol Tatara, Paweł Kuglarz, Anna Czarnota and Mateusz Kaliński, Tatara & Partners Restructuring & Insolvency Law Firm
Preserving value for creditors It should also be noted that the pre-pack procedure significantly improves the preservation of the value of the debtor’s enterprise from the point of view of its creditors. This is also of considerable importance from the point of view of preserving the enterprise itself, as well as jobs, and the principle of a smooth transition Interestingly, Article 23 of the Proposal also explicitly provides for the suspension of enforcement proceed - ings, including in the case of preliminary proceedings, in the pre-bankruptcy phase. Changes to contracts and pre-emptive rights The Proposal provides for changes to contracts entered into by the debtor, by allowing these to pass to a new buyer even without the consent of the other party, and it would also be desirable to clarify what happens to the right of first refusal in the case of a sale in a pre-pack liquidation. Issues in Poland’s judicial system between ownership entities. Protection from enforcement Changes to the judicial system in Poland are urgently required. For example, an appropriate organisational structure is required for the insolvency-related judicial system, which is currently inefficient, despite the fact that reform of this system has been discussed for at least 20 years. Secondly, important changes need to be introduced to insolvency practitioners’ formal self- government structures, endowing them with the pos - sibility to enforce disciplinary responsibility. With regard to the organisation of the judicial system, first-instance bankruptcy and restructuring cases are currently processed in the district courts ( sądy rejonowe ), which are the lowest level of Polish courts, irrespective of the value of the case and its complexity. Therefore, a first-instance judge has to deal with com - plex restructuring cases valued at billions of Polish zloty as well as simple consumer bankruptcy cases of relatively small value. The workload is overwhelming. First-instance judges are dealing with approximately 200 consumer bankruptcy cases and ten corporate restructuring cases at the same time – an untenable workload.
A better system would leave consumer bankruptcy cases at the district court level, so that individuals would have easy access to justice, while complex restructuring cases could be moved to the regional courts ( sąd okręgowy ). Such a reform has been dis - cussed for over 20 years, and has lately been empha - sised by the INSO Section of the Allerhand Institute. The regional courts could also become specialised second-instance courts for cases from the district courts. Moreover, cases heard in the regional courts could be appealed to the appellate courts ( sądy apelacyjne ), which would help to make judgments in restructuring cases more consistent. Currently, Poland struggles with differing judgments in similar cases, which is a pitfall that needs to be addressed. There is also a need to create a special chamber or unit within the Supreme Court ( Sąd Najwyższy ) in Poland, which would be responsible for restructuring and insolvency cases. This reform would comply with the requirements set forth in the Restructuring Direc - tive, which emphasises efficient judicial systems and also the proper training of insolvency practitioners. 4.3 The End of the Restructuring, Rehabilitation and Reorganisation Procedure Restructuring proceedings in Poland either end in discontinuation, or final approval of the arrangement, which is followed by enforcement of the arrangement. During restructuring in Poland, the debtor can oper - ate a business, provided that for acts exceeding the scope of ordinary management, the consent of a court supervisor is obtained. The consent may also be granted after the performance of the act in question, although the debtor risks nullity if consent is refused. In remedial proceedings, the debtor is superseded by the receiver (administrator) who manages the estate and operations. However, with the court’s consent, the debtor may act on their own, within the scope of ordinary management. 4.4 The Position of the Debtor in Restructuring, Rehabilitation and Reorganisation
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