POLAND Trends and Developments Contributed by: Karol Tatara, Paweł Kuglarz, Anna Czarnota and Mateusz Kaliński, Tatara & Partners Restructuring & Insolvency Law Firm
Gazette ( Monitor Sądowy i Gospodarczy ). The benefits include a stay of enforcement and prohibition of the termination of contracts that are necessary to carry on doing business. Since these effects are very benefi - cial for the debtor, the legislator has also introduced a counter-tool for creditors – namely, a petition to cancel the effects of making the announcement, which may be granted by the restructuring court. However, data shows that this tool has not been used frequently. It is believed that the SRP may be a model for imple - menting the Directive, and research into this possibil - ity is currently being conducted. One thing is certain: the SRP is the most popular restructuring proceeding, accounting for 90% of all restructuring proceedings in Poland (according to reports on simplified restructur - ing published on INSOL Europe’s website). These proceedings are also the quickest in the insol - vency and restructuring framework. The arrangement must be made within four months of the commence - ment of the proceedings, during which time, the petition to approve the arrangement should be filed with the court. This presents an obstacle, however, because restructuring courts in Poland are currently jammed with cases and are consequently slow to examine them. In the meantime, the stay of enforce - ment continues, unless cancellation of the effects of opening the proceedings is issued by the court. The SRP was originally intended to remain in force only until 30 June 2021, later extended until 30 November 2021. However, the popularity of this process among distressed entrepreneurs led the Polish legislator to decide to retain it for an indefinite period of time. Since 1 December 2021, new proceedings have adapted the SPR to fit the Polish legal system. The latest amendment brought about other changes in the proceedings, as follows: • the announcement on the opening of the proceed - ings to approve the arrangement is made by the arrangement supervisor, not by the debtor; • the announcement may be made only after the debtor has submitted the list of receivables and the list of disputed receivables;
• the arrangement supervisor lists the agreements that are essential for the functioning of the debtor’s enterprise, so as to prevent its termination; • the court’s decision on the cancellation of the effects of making the announcement may be appealed; and • the case files are kept by the arrangement supervi - sor. In more than 17 months of functioning, simplified restructuring proceedings have been resorted to by more than 1,600 entrepreneurs, while other restruc - turing proceedings have been applied only 450 times in the same period. However, these proceedings are no longer in force in Poland. Taking into account that there are four other restructuring proceedings to choose from, this makes the SRP a resounding suc - cess. In addition, changes are planned to the liquidation arrangement, which will benefit from the enforcement sale, permitting the sale without old liabilities for the investor. This is expected to be a real game changer in many proceedings. Digitalisation of proceedings The growing number of restructurings and consumer bankruptcy proceedings has overwhelmed the courts, although the National Debtors Register ( Krajowy Rejestr Zadłużonych ) started to operate on 1 Decem - ber 2021. It was hoped that this register would make proceed - ings much more transparent and easier to follow, because all the important information regarding the proceedings would be available online in one place. Unfortunately, this has not been the case. The regis - ter is indeed transparent, but in many cases it is not available. The National Debtors Register should allow any stake - holder in bankruptcy and restructuring proceedings to obtain information about the relevant proceedings and their current status. It should also enable access to the documents relating to the proceedings. In reality, it often malfunctions.
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