POLAND Law and Practice Contributed by: Karol Tatara, Paweł Kuglarz, Anna Czarnota and Mateusz Kaliński, Tatara & Partners Restructuring & Insolvency Law Firm
uisite for such liability is having a decisive effect over the company in distress. Although such officers do not sit on the board, they in fact manage the company and thus can be held liable as so-called shadow directors. 7.4 Other Consequences for Directors and Officers Under Polish law, creditors are entitled to assert fidu - ciary breach claims directly against directors and officers. In addition, directors and officers may face criminal liability. 8. Setting Aside or Annulling a Transaction 8.1 Circumstances for Setting Aside a Transaction or Transfer In Poland, particular transactions (or broadly, acts in law) are, by operation of the law, ineffective with respect to a bankruptcy estate or may be held inef - fective with respect to a bankruptcy estate by a judge-commissioner’s decision. As a result, such transactions or acts in law are deemed never to have occurred within insolvency proceedings. The judge-commissioner may challenge, according to Articles 127 and others of the Bankruptcy Law, trans - actions with related parties and/or family members performed by the debtor within six months preced - ing the date of filing the bankruptcy petition, as well as an encumbrance of the bankrupt person’s assets with (among others) a mortgage or registered pledge, if the bankrupt person was not a personal debtor of the secured creditor and if the encumbrance was established within one year prior to the filing of the bankruptcy petition, and the bankrupt person did not receive any consideration for the establishment of such encumbrance. The other party to such an ineffective transaction or act in law is obliged to contribute to the bankruptcy estate anything that has been transferred, or not con - tributed, as a result of such ineffective act.
In certain cases, reciprocal consideration provided by the other party may be returned. If consideration can - not be returned, that party may assert its claims in bankruptcy proceedings on a par with other creditors. On the other hand, the party who received the pay - ment or the security may, by bringing an action, seek the recognition of such acts as effective if at the time when the same were performed, the party was una - ware of the existence of the grounds for declaring bankruptcy. Under Polish law, acts in law that may be challenged include, among others, those performed gratuitously (or that are significantly undervalued) within one year before filing the bankruptcy petition, whereby the debtor disposed of their assets. The same applies respectively to court settlements, admission of an action, and a waiver of a claim. Moreover, securities and payments of an unenforce - able debt, given or made by the debtor within the six months before filing the bankruptcy petition, are inef - fective with respect to the bankruptcy estate. In this regard, Polish law appears to be compliant with EU regulations. 8.2 Claims to Set Aside or Annul a Transaction or a Transfer Under Polish law, most claims may be set aside or deemed ineffective by operation of the law. In some circumstances, however, a trustee is entitled to demand that certain acts in law or transactions be held ineffective. The judge-commissioner has the power to decide this issue. Setting aside or annulling a transaction may take place both in insolvency proceedings and in remedial proceedings – one of the restructuring options. The trustee may also raise actio pauliana claims. Such proceedings are free from court fees.
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