The arrangement approval procedure is dedicated to debtors at risk of insolvency who need to conduct a quick restructuring. The most important stage of the procedure, from the arrangement date to the submission of an application for approval of the arrangement, lasts a maximum of 3 months. PZU’s speed is mainly due to the fact that at the initial stage of the proceedings the role of the court was limited and the legislator provided deadlines for carrying out specific activities, such as submitting an application to the court for approval of the arrangement. This allows the entire procedure to be kept within a specified time frame. The key stages of the procedure include:
- Selection of the appropriate restructuring advisor – an entrepreneur struggling with financial problems is looking for a restructuring advisor who will take over the function of the arrangement supervisor at the stage of the proceedings. Selection of the appropriate restructuring advisor is crucial. Such a person should have appropriate experience (e.g. having previously conducted restructuring proceedings for an entity operating in the same industry) and organizational background, including staff supporting their activities. In addition, the advisor should act reliably and engage in the proceedings. When choosing the right entity, it is worth considering not only the price of the service, but above all what they are able to guarantee us, taking into account their previous experience and the way they perform their function. It should be emphasized that the restructuring advisor is not the debtor’s attorney, does not provide legal services to the debtor and does not represent their interests. Often creditors, but also debtors, due to the scope of duties and the relationship between the debtor and the supervisor, mistake their role. When conducting the restructuring process, the arrangement supervisor takes into account the interests of both the creditors and the debtor. The arrangement supervisor is responsible for preparing key documents in the restructuring proceedings, which should be created in due time. It should be remembered that the arrangement supervisor relies on information provided by the debtor.
- Conclusion of an agreement with a restructuring advisor (duration: approx. 1 week) – establishing cooperation with a restructuring advisor who will act as an arrangement supervisor is the first step to initiating PZU. The basis for cooperation is an agreement on supervision over the course of the arrangement approval procedure. The arrangement supervisor is to support the debtor at the stage of the procedure not only with their professional knowledge, but also with experience in preparing the necessary documents. In addition, the arrangement supervisor coordinates the course of the entire procedure. Due to the fact that PZU is conducted without the participation of the Court, the debtor should decide to cooperate with a restructuring advisor who has the knowledge and experience.
- Announcement of the arrangement date – (duration: approx. 2 weeks) setting the arrangement date is another characteristic and important element of the arrangement approval procedure. The arrangement supervisor, after beginning to perform his duties, immediately sets the arrangement date. The arrangement date cannot fall earlier than three months and no later than one day before the date of filing the application for approval of the arrangement. Setting the arrangement date has many effects. Firstly, this date determines the division of receivables into those covered by the arrangement (i.e. those arising before the arrangement date) and those not covered by the arrangement (those arising on and after the arrangement date). In addition, the creditors’ rights to vote on the arrangement and the effects of the accepted arrangement are also determined according to the arrangement date.
The announcement of the arrangement date establishes almost complete protection for the debtor against enforcement. It ensures that the debtor’s assets are covered by statutory protection against enforcement. After the announcement of the arrangement date, it is also not permissible to enforce the provisions on security if their subject is the debtor’s assets. The announcement also provides protection for key agreements for the debtor’s enterprise. After the announcement of the arrangement date, the other party to such a key agreement cannot freely terminate the contract binding it with the debtor due to arrears in its performance. Importantly, the counterparty will be able to terminate the contract if the debtor fails to settle current obligations resulting from the contract. One of the negative consequences for the debtor resulting from the announcement is the inability to perform activities exceeding ordinary management. To perform such activities, it is necessary to obtain the consent of the arrangement supervisor.
- Voting on the arrangement – (duration: approx. 3 weeks) in the procedure for approval of the arrangement, the debtor seeks to conclude an arrangement with the creditors, under which the method and schedule of repayment of its debt will be established. At the stage of voting on the arrangement, the case file should contain key documents that allow the creditor to decide whether to vote for or against the arrangement. The case file should contain: a sample ballot, voting instructions, arrangement proposals, a restructuring plan, a debtor’s statement on recognition of the claim, a private creditor test, a list of claims, a list of disputed claims, and an opinion on the possibility of implementing the arrangement.
Voting can take place in one of two variants. The first is voting in the vote collection mode, while the second mode involves voting at a meeting of creditors.
At the request of the creditor, the arrangement supervisor should provide information on the basis of which the creditor will be able to assess whether casting a vote in favour of accepting the arrangement will be beneficial to him.
In addition, the creditor has the possibility to submit objections to the arrangement. Objections are submitted to the arrangement supervisor via the teleinformatic system of the National Debt Register. They may concern the legality of the course of independent vote collection or other circumstances that may affect the approval of the arrangement. The objections submitted in the above manner (this does not apply to objections submitted orally, by e-mail or in any other form) the arrangement supervisor is obliged to attach to his report, submitted to the court together with the application for approval of the arrangement. Thanks to this, the restructuring court will be able to take them into account when considering whether there are obstacles to the approval of the arrangement. In order for the arrangement to be accepted, it is necessary to obtain simultaneously: a personal majority (more than half of the voting creditors must vote in favour of accepting the arrangement) and a capital majority (at least two thirds of the sum of receivables due to the voting creditors). Obtaining the appropriate majority is calculated by the arrangement supervisor, who then confirms the acceptance of the arrangement.
Co-authors: Marta Łużyńska and Maciej Woźniak
