Restructuring and bankruptcy proceedings in January 2023
The National Register of Indebtedness (KRZ) gave an opportunity to quickly assess the current situation of restructuring and bankruptcy proceedings in the country. Despite some shortcomings of the system, collecting data on initiating and finalizing proceedings has become easier, which is conducive to the analysis of trends and changes in this area. In the longer term, systematic data analysis creates an opportunity to draw conclusions regarding statistics and, consequently, valuable forecasts for market participants.
Below we present the results of the analysis of announcements published in KRZ in January 2023. In particular, we looked at:
- the number of applications to initiate court restructuring proceedings and announcements on the arrangement date in out-of-court proceedings for approval of the arrangement (PZU),
- the number of open court restructuring proceedings,
- the number of applications for bankruptcy and the number of declared bankruptcies.
Restructuring proceedings
In January 2023, 290 restructuring proceedings were opened. Of these, 19 are judicial and 271 extrajudicial. This is 6.5% and 93.5%, respectively.
Chart 1. Number of court and out-of-court restructuring proceedings opened in January 2023.
Source: Own elaboration based on data collected from KRZ.
In the period under review, 42 applications for opening court restructuring proceedings were announced. 20 applications each concerned accelerated arrangement proceedings (PPU) and sanation proceedings, while two applications concerned the opening of arrangement roceedings. The number 42 is higher than the monthly average from the first half of 2022, which is 32.3 (data from the MS-S20UN form for the first half of 2022 – cases entered in the GR repertory). This may indicate an increased interest in judicial restructuring proceedings.
Chart 2. Number of applications to initiate court restructuring proceedings submitted in January 2023.
Source: Own elaboration based on data collected from KRZ.
In January 2023, 19 court restructuring proceedings were opened – 8 accelerated arrangement proceedings, 9 remedial proceedings and 2 arrangement proceedings. This result is also higher than the average from the first half of 2022, in which PPU opened an average of 5.3 PPU, 1 arrangement proceedings and 6.8 sanation proceedings per month (a total of 13.2 proceedings in total).
Chart 3. Number of court restructuring proceedings opened in January 2023.
Source: Own elaboration based on data collected from KRZ.
Out-of-court restructuring proceedings – proceedings for approval of an arrangement (PZU) enjoyed the greatest interest. In January, 271 debtors expressed interest in this type of restructuring. However, this number does not reflect all commenced proceedings for approval of the arrangement, but only those in which the debtor decided to take advantage of the protection provided by the announcement in the KRZ.
The number of 271 announcements on the arrangement day confirms the great popularity of PZU. On a monthly basis, this is the second highest result in history (after November 2022). At that time, 274 announcements were recorded. It is also higher than the average for the previous six months (July-December 2022), which was 237.
Chart 4. Number of opened restructuring proceedings in January 2023, broken down by individual types of restructuring.
Source: Own elaboration based on data collected from KRZ.
Bankruptcy proceedings
In January, 1,776 debtors’ applications for bankruptcy were filed with restructuring and bankruptcy courts. Of these, 91 concerned commercial law companies, and 1,685 natural persons* . This is 5% and 95% respectively.
Chart 5. Number of bankruptcy filings filed in January 2023.
Source: Own elaboration based on data collected from KRZ.
Courts issued 1,649 bankruptcy decisions. Of which 23 provisions on commercial law companies, and 1,626 natural persons. This represents 1% respectively and 99%.
Chart 6. Number of bankruptcy decisions issued in January 2023.
Source: Own elaboration based on data collected from KRZ.
Summary
The analysis of the data cited above leads to several conclusions. First, it’s noticeable PZU’s popularity has not diminished over the last year. The January result of announcements on the arrangement day should be considered high compared to the data from the last six months. The increase in interest in court restructuring is noteworthy, as evidenced by the registered records and recognized applications in this regard. However, the assessment of the structure of bankruptcy proceedings is hampered by the lack of an appropriate functionality of the KRZ, which makes it impossible to determine what percentage of those applying for bankruptcy are entrepreneurs and what percentage are consumers.
The study was prepared by: Legal Counsel Maciej Woźniak and Ph.D Maria Wasicka-Sroczyńska
* By natural persons we understand both applications submitted by consumers and entrepreneurs conducting business activity.
