Voting on the arrangement in restructuring proceedings
The amendment to the Restructuring Law entered into force on 1 December 2021. It introduced a number of changes with respect to voting on the arrangement in restructuring proceedings.
The modifications are primarily technical in nature. In contrast, their purpose is to integrate the voting on the arrangement with the National Register of Debtors (KRZ).
The amendments cover the general provisions on the creditors’ meeting (Articles 104-112 of the P.R.). They therefore also indirectly affect the conduct of the creditors’ meeting for the purpose of voting on the arrangement. This is regulated in specific provisions (Articles 113-120 p.r.). The arrangement determines the manner in which the debtor’s liabilities are restructured – most often through a combination of write-offs, deferrals and instalment payments of liabilities.
Several basic elements of a creditors’ meeting to vote on an arrangement can be listed.
1. Notice convening the meeting
One of these is the convening notice. The content of such a notice contains basic data. These include the date, venue, subject matter and method of voting. In addition, there is an obligation to indicate in the content of the notice whether the meeting will be held using electronic means of communication. In connection with the introduction of the NCR, notices are published only in that register. Creditors who have an account there will be notified of the date of the meeting through the KRZ. Such notification should reach them at least 3 weeks before the date of the meeting.
2. Conduct of the meeting
The next element is the conduct of the meeting. In order for the assembly to take place, it is necessary to have a quorum. Such an assembly must be attended by at least one fifth of the creditors entitled to vote. This means that a relatively small number of creditors can decide whether or not to accept the arrangement.
3. Right to vote at the creditors’ meeting to vote on the arrangement
Only creditors who are covered by the arrangement have the right to vote on the arrangement (with certain exceptions). As a general rule, these are creditors whose claims arose before the date on which the proceedings were opened (or the date of the arrangement) and were entered in the approved list of claims. However, the absence of a listing does not always mean that the claim will not be covered by the arrangement. Voting rights at the creditors’ meeting may be exercised by the creditor in person or by his/her proxy.
4. Voting on the arrangement
The amendment gives priority to voting via the NCJ. The vote is conducted by the court supervisor (administrator). The supervision of the specific arrangement proposals is exercised by the judge-commissioner. It is possible to vote for or against. A creditor cannot abstain from voting. If technically possible, the creditors’ meeting may vote via electronic means of communication. Alternatively, voting may be carried out solely through the NCR. The method of voting is set out in the Notice.
5. Acceptance, declaration of acceptance and approval of the arrangement
The resolution to approve the arrangement is generally adopted if a majority of the voting creditors vote in favour. These creditors must be those who have cast a valid vote and have jointly at least 2/3 of the total claims of the voting creditors. If the creditors are divided into groups, the indicated majorities in each group must be obtained. If all groups do not accept the agreement, a joint majority of 2/3 of the total voting creditors is possible. However, the creditors who are against must be satisfied to a greater extent than in the bankruptcy proceedings.
At the end of the vote, the judge-commissioner issues a non-appealable decision accepting the arrangement. The accepted arrangement is then approved by the court. However, the court may refuse to approve the arrangement if it violates the law or if it is clear that it will not be performed.
This text is an extract from a practical commentary prepared by the author for Wolters Kluwer. The full version of the commentary is available to LEX system users at https://sip.lex.pl/#/publication/470171655/kempinski-piotr-glosowanie-nad-ukladem-w-postepowaniu-restrukturyzacyjnym?keyword=piotr%20kempi%C5%84ski&cm=SFIRST.