Poland is amending its bankruptcy and restructuring law to implement the EU's Directive of 20 June 2019 on preventive restructuring frameworks, also referred to as the 'second chance directive'.
Key planned changes
- Satisfaction test: This test, mandatory in all restructuring proceedings, compares the company’s value as a going concern with its bankruptcy value, helping assess potential benefits for creditors. Micro-entrepreneurs will be exempt from this test to ease their access to restructuring options.
- Extended disclosure obligations: Debtors will need to submit more documents when applying for a restructuring, such as information on the impact on employees and a list of entities excluded from the restructuring plan with reasons for their exclusion.
- Arrangement approval despite objections: Courts may approve arrangements even if some creditors object, provided the terms offer better outcomes than bankruptcy.
- Employee impact assessment: Debtors must describe how the restructuring affects employment, including possible redundancies and organisational changes.
- Inclusion of secured creditors: Secured creditors will automatically be included in arrangements, improving the transparency and comprehensiveness of the restructuring.
Although the deadline for implementing the directive passed on 17 July 2022, Polish regulations are not yet aligned with EU standards - due to a delay of over two years. The draft amendments are now expected to be adopted in 2025.
Find out more
To discuss the issues raised in this article in more detail, please contact a member of our Restructuring and Insolvency team.
EU Directive 2019/1023
