Simplified restructuring will be less attractive

The revised arrangement approval procedure replaced the simplified restructuring as of December 1. However, it is not as attractive as the previous solution.

The changes were introduced by the amendment of May 28, 2021. Act on the National Register of Debtors and certain other acts. As a result, the National Debtors Register (KRZ) also came into force. It will be possible to find, among other things, information on debtors and also on the conduct of restructuring against the company. The system is to be 100 percent electronic, free of charge, open and generally available. Only newly opened proceedings will be entered into the system. Those already pending will be closed under the old rules. Whether the system will be successful depends mainly on whether it will operate without technical problems.

The amendment also introduced a new version of the so-called simplified restructuring proceedings. According to experts, the new version of simplified restructuring, however, will not repeat the success of the original solutions. One of the reasons is that information about filing an application to open restructuring will be made public in the NCR. This will cause reactions of the debtor’s counterparties. Moreover, the new regulations lack the exclusion of board members’ liability from the moment of announcing the opening of restructuring. Another disadvantage is that the possibility to take advantage of this procedure is limited in time. It can be done only once every 10 years.

Source: https://www.prawo.pl/biznes/uklad-zamiast-uproszczonej-restrukturyzacji,512041.html