A creditor secured by a registered pledge in restructuring proceedings

A creditor secured by a registered pledge in restructuring proceedings

The protection of the interests of creditors who have special rights to the debtor’s assets affects the course of the restructuring proceedings and the position of its participants. In many cases, the privileges of people who are entitled under a registered pledge allow them to go through this process with a dry foot. However, it is worth taking a closer look at the situation of such creditors.

Including the creditor in the arrangement

The first consequence of the opening of restructuring, which is acute for creditors, is that the debtor withholds due benefits that arise from existing obligations. In such a situation, however, the creditor secured by a registered pledge is privileged and the payment ban does not apply to it.

He may demand both voluntary payment and exercise his right by way of compulsion. However, his rights in this regard differ depending on the type of restructuring proceedings. In the case of sanitation and the new procedure for approval of an arrangement, effective as of December 1, 2021, it is not permissible to conduct any enforcement against the debtor’s assets, even if it is directed solely to the subject matter of the security.

The creditor secured by the registered pledge also has no influence on the result of voting on the arrangement. He is a non-contractual creditor, so he does not have the right to vote. The exception is the situation in which he voluntarily agrees to be included in the agreement, despite the negative effects that result from it. He will do so if he finds that adopting the arrangement is in his favor. In this case, he will not lose the right to current repayment in the course of the proceedings, but may be affected by the restructuring of the liability, i.e. for example partial redemption or conversion into shares or stocks.

It is also worth remembering that even if the obligation to pay the creditor secured with a registered pledge is introduced after the opening of the procedure, the restructuring law does not provide for any sanctions for failure to comply with it.

The proceedings will not be discontinued even if the payments are completely stopped. This may happen as a result of non-performance of obligations that arose after the opening of the proceedings, as well as receivables that cannot be covered by the arrangement.

The lack of sanctions for the suspension of payments is particularly acute in the case of the sanitation proceedings, as well as the new, in force since December this year, proceedings for approval of the arrangement. In these proceedings, any form of enforcement against the debtor’s property is prohibited.

From December 1 this year, there are more possibilities for creditor secured with a registered pledge to be included in an arrangement. If his claim is not reduced (in practice – divided into installments) and it is repaid in the arrangement at least to the same extent as under the registered pledge, it will be covered by the arrangement. This means that this creditor will take part in voting on the arrangement and the repayment of the secured debt will be prohibited.

Partial cover on the subject of the pledge

The principles described above also apply when the creditor is partially secured when his claim is higWedziukher than what he could obtain from the subject covered by the registered pledge.

In such a case, the entitled person enjoys the privileges of the secured creditor only in the part in which he could count on payment from the subject of the registered pledge. Therefore, the value of the encumbered item, which is determined for a forced sale (in bankruptcy proceedings), is of key importance.

In practice, the position of the creditor in restructuring proceedings depends on the value of the pledged object. It is often a flashpoint between the creditor and the supervisor or manager. Depending on the type of proceedings, a participant may enter into a dispute over this value, and in some cases an expert opinion may be obtained on this circumstance.

Tender or takeover of the subject of the pledge

The registered pledge agreement may provide for non-enforcement forms of satisfying the pledgee. Particularly noteworthy is the acquisition of the subject of the pledge for ownership and its sale by tender. The opening of restructuring proceedings does not prevent the creditor from taking advantage of these forms of satisfaction. It is also possible in sanitation proceedings and new proceedings for approval of an arrangement, because during them only enforcement against the debtor’s property is prohibited.

However, there are no obstacles for the creditor to be paid in non-enforcement procedures.The amount obtained from the sale of goods or the contractually agreed value of its takeover is credited towards the secured claim. In the event of a surplus, the creditor should return it to the debtor’s property, and in the event of a shortage, this part will be includet in the arrangement.


Creditors secured with a registered pledge are in a much more advantageous position than those who do not have collateral. First of all, they can be satisfied by taking ownership of the collateral or by conducting its own tender. Thanks to this, the collateral with a registered pledge may bring additional benefits in the event of restructuring. The amendment to the regulations as of December 1, 2021, increasing the possibility of covering creditors secured by the arrangement, however, has a negative impact on the guarantees resulting from the registered pledge.


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