Return of the obligation to file for bankruptcy?
The COVID-19 pandemic has forced many countries to take steps to protect their economies. Restrictions on the number of people allowed to stay in stores were introduced, shopping malls were closed and the use of hotels and restaurants was limited. This translated into a significant deterioration in the financial situation of many entrepreneurs. Currently, due to the increasing number of vaccinated people, the Polish government is considering lifting the epidemic. Therefore, it is necessary to consider how this will affect the obligation to file for bankruptcy?
Suspension of obligation
As part of the so-called of the anti-crisis shield 2.0, the obligation to file for bankruptcy has been suspended for all entrepreneurs. It was and is important that the basis for filing a bankruptcy petition arose during the period of the epidemic threat or epidemic state declared due to COVID-19.
In order to facilitate the assessment of the situation, the legislator introduced a presumption that the state of insolvency that arose during both epidemic states means that it arose due to COVID-19.
Due to the epidemiological threat in force from March 14, 2020, and then the state of the epidemic from March 20, 2020, the deadline for submitting a bankruptcy petition is still not running.
Return of duty
The epidemiological situation in Poland is changing and the government is considering lifting the epidemic. This will mean the lifting of the existing restrictions, but also the commencement of the deadline for submitting a bankruptcy petition.
Therefore, if the government lifts the state of the epidemic and does not introduce the state of epidemic threat, entrepreneurs will be obliged to quickly verify their economic situation, in particular in terms of financial liquidity. Pursuant to the provisions of the bankruptcy law, an entrepreneur is obliged to file a petition for bankruptcy within 30 days from the date on which he became insolvent. On the other hand, failure to submit the application on time may result in property liability for the company’s obligations (in the case of management board members), prohibition of conducting business activity, and even criminal liability.
In order to avoid liability, each entrepreneur should monitor his economic situation on an ongoing basis, in particular in terms of financial liquidity. He should also follow the information concerning the lifting of the epidemic state and the failure to introduce the state of epidemiological threat on an ongoing basis.
Fortunately, filing for bankruptcy is not the only solution in the event of insolvency. An entrepreneur may open a simplified restructuring procedure (the so-called covid restructuring), which is conducted mostly outside the court, is quick and involves relatively low costs. It makes it possible to conclude an arrangement with creditors and – provided that corrective actions are taken in the business sphere of the company – to permanently improve the financial situation.