In June 2020, the "Anti-Crisis Shield 4.0" introduced a simplified form of restructuring proceeding into Polish law. This modified version of the procedure ushered in significant improvements for debtors, including a moratorium on enforcement action and four months to seek the consent of creditors to restructuring proposals, and to seek the approval of the arrangement with the court.
This procedure was temporary and is now discontinued. However, the popularity of this form of restructuring – which constitutes 49% of all current restructuring proceedings – has led the Polish legislator to commence work on introducing permanent simplified restructuring proceedings to restructuring law provisions.
Permanent changes
While the legislator plans to adopt some of the Anti-Crisis Shield 4.0 changes, following an in-depth analysis of the current practice, it will also modify several areas, including:
- commencement of proceedings
- duration of proceedings
- creditors' votes on the arrangement
- protection of the debtor's assets, and
- treatment of secured claims under the arrangement.
Key takeaways
The simplified enforcement procedure has proved to be an effective tool to keep debtors in business and to protect their assets without the need for extended and expensive court proceedings. Introducing the procedure permanently into the legal system is a positive step. Only time will tell which changes will ultimately make it into the new legislation following the legislative process.
Find out more
To discuss the issues raised in this article in more detail, please reach out to a member of our Restructuring & Insolvency team.
