Who will be helped by the simplified restructuring procedure?
The new restructuring procedure will work for debtors whose business is profitable, but due to a temporary reduction in income, they are unable to pay their liabilities.
The financial support granted to companies under the anti-crisis shields is slowly coming to an end. So the time has come to verify how helpful it was. Certainly, many entrepreneurs regained their financial liquidity thanks to government aid. However, there will be some who still have problems and need to ask themselves what to do next? Some of them decide to restructure. The fourth edition of the anti-crisis shield introduced its simplified mode.
The main goal of the new restructuring mode is to help entrepreneurs who are unable to pay their liabilities because their revenues have decreased as a result of the COVID-19 pandemic. There are already companies that have decided to use this solution. In early September, Rafako announced its intention to open a simplified restructuring procedure. According to the Money.pl portal, in 2019 the company recorded a loss of PLN 473 million. Its present situation is mainly due to the implementation of non-profitable contracts and the discovery of the effects of actualization. people.
Accelerated arrangement proceedings
Until now, companies that had problems with solvency and wanted to restructure have preferred accelerated composition proceedings (the so-called PPU). It owes its popularity mainly to its short duration, compared to other types of restructuring, and to the fact that it provides protection against debt collection activities by creditors. It is conducted entirely under the supervision of the court, so its duration is in fact longer than that provided for in the regulations.
The simplified restructuring procedure combines the procedure for approval of the arrangement with securing the debtor against the initiation of enforcement by creditors and can successfully replace the PPU. It meets the current postulates of the doctrine and solutions indicated in the Directive of the European Parliament and of the Council (EU) 2019/1023 of June 20, 2019 and should permanently enter our law as one of the restructuring proceedings that can be used by debtors. However, it must be remembered that it will not be a good solution for every entrepreneur. It is ideal for debtors whose business is profitable, but due to a temporary reduction in income, they need to cancel their debt and partially write off their arrears. On the other hand, entrepreneurs whose financial problems do not result from temporary problems should consider choosing a different restructuring procedure – one that will give them time to reach an agreement with creditors or carry out remedial measures.
In general, any restructuring can be successful. You just need to choose the right procedure for the debtor’s situation. Otherwise, it may not be possible to take the actions that the entrepreneur actually needs, and therefore to get straight.