Popularity of the simplified restructuring procedure
On June 24, 2020, an act was passed under which a new restructuring procedure was introduced, known as simplified restructuring.
So far, that is six months after the possibility of taking advantage of this type of restructuring, nearly 250 entrepreneurs have decided to do so. As the representatives of the Ministry of Justice admit, this number surprised them, but it clearly proves the popularity of this procedure.
As experts point out, the above-mentioned popularity is a consequence of the advantages attributed to the simplified restructuring procedure, namely: independent opening of the procedure by the entrepreneur by making an announcement in the Social and Economic Monitor, suspension of executions pending so far against him and the inability to terminate significant contracts concluded with the entrepreneur.
However, one should not forget about the doubts that accompany the assessment of the new procedure. Well, in some cases, the 4-month period available to the debtor to enter into an arrangement with creditors may turn out to be insufficient. In such cases, the decision on simplified restructuring leads to a request for the opening of the rehabilitation. In addition, the entrepreneur is not always able to properly prepare the assessment of the company’s financial situation, and this translates into incorrect preparation of arrangement proposals. The correctness of the control of proceedings by financial creditors also raises concerns.