Proposals for amendments to the Restructuring Law in connection with coronavirus
By introducing the Restructuring Law, the legislator wanted to support entrepreneurs in their financial problems. Restructuring proceedings were to be fast and thus effective. Everyone is aware of the importance of the time to take appropriate action in the event of financial problems. Nowadays, during the coronavirus pandemic, the response time is even more important. Consideration should therefore be given to amending the provisions of the restructuring law in order to speed up and simplify it.
I therefore propose the following amendments to the Restructuring Law:
(1) more closed meetings, with the possibility of a hearing.
Abolition of the mandatory hearings under Article 148(1) of the Code of Civil Procedure or Article 95(2) of the Treaty on the Functioning of the European Union, in particular as regards the hearing on the approval of the agreement, with a further proposal to merge the decision on the approval of the agreement and the approval of the agreement into a single decision.
(2) Voting on the adoption of the Agreement by circulation as the main means of voting.
(3) First meeting of the creditors’ council by remote voting as an acceptable way of meeting.
(4) Allowing the submission of letters by e-mail to the judge-commissioner by supervisors and administrators.
(5) Protection of assets together with the submitted motion without waiting for the opening of proceedings.
This applies both to the application for opening of the proceedings (accelerated, composition and court proceedings) and the proceedings for the approval of the agreement – the protection would be activated together with a statement submitted to the court after the agreement date on the opening of the proceedings for the approval of the agreement and a security application accompanied by a preliminary restructuring plan with the opinion of the supervisor of the agreement.
The protection would be granted by law as of the date of the application, provided that the court does not refuse the security within 7 days. The scope of protection would be as follows:
– prohibition of enforcement + suspension of enforcement pending,
– prohibition to terminate / change key contracts due to lack of payment before the arrangement date,
– no deductions,
– The debtor’s actions exceeding the scope of ordinary management require the consent of the supervisor of the arrangement or even ex lege a prohibition to dispose of / encumber the assets by the debtor outside the normal course of business. Protection period: until the date of opening the proceedings or (even illegitimate) refusal to open the proceedings, and in proceedings for approval of the arrangement: 4 months with automatic extension if an agreement has been concluded during this time in the mode of independent collection of votes.
(6) clear indication that the dispatch of court letters to multiple creditors may be handed over to the administrator by order of the judge-commissioner
(7) Simplification of the formal conditions for restructuring applications, in particular:
– Exclusion of the obligation to attach composition proposals together with an application to open an accelerated arrangement procedure and the arrangement procedure;
– Limiting the list of creditors to address data and the amount of claims;
– Exclusion of the obligation to indicate the scope of the creditors in kind
(8) reduction of the number of cases subject to the cognizance of a court or a judge-commissioner, in particular:
– Combining in a single decision the decision to approve the agreement and the decision to approve the agreement. Both decisions may be made in the form of resolutions immediately after the meeting of creditors, within a specified publication period, by which objections may be raised to the approved composition agreement. Participants retain the right to appeal to the district court – the second instance court;
– the need for the restructuring plan to be approved by the judge-commissioner in the event of a prior positive opinion of the creditors’ council (Article 315(1))
– only the possibility for the judge-commissioner to modify the restructuring plan (Article 315(2) p.r.)
(9) Simplification of the restructuring plan for small businesses