New simplified restructuring came into effect
On the first of December, the Act of 28 May 2021 amending the Act on the National Debt Register and certain other acts enters into force. It permanently introduces the so-called simplified restructuring to the Polish legal order.
Simplified restructuring proceedings started to operate last year, thanks to the Anti-Crisis Shield 4.0. It quickly gained great popularity. The amended proceedings for approval of an arrangement, which are now entering into force, are in fact its continuation. It is not significantly different from the covid simplified restructuring. An arrangement will still be concluded out of court as a result of negotiations between the debtor and the creditors. These will take place under the supervision of a supervisor chosen by the debtor. The debtor will be protected against enforcement and termination of contracts by counterparties. The duration of the proceedings should close within four months.
However, there are also some differences. For example, the new procedure for approval of an arrangement strengthens the protection of the indebted entity. This is a result of the introduction of general protection against executions.
However, the new simplified restructuring also has some limitations. The regulations lack the equivalent of Article 25 of Shield 4.0. Thanks to it, members of the management board were protected from personal liability for the company’s debts from the date of the announcement of the commencement of restructuring proceedings. Now, board members will be relieved of liability only upon approval of the arrangement.
The new legislation also introduces the National Registry of Debtors (KRZ). It is an IT system. It will make it possible to obtain information on pending restructuring and bankruptcy proceedings electronically. The same way it will be possible to submit letters and applications.