three years of application of the Restructuring Law – cross-cutting analysis of regulations

Act of 15 May 2015 Restructuring law[1] introduced 1 January 2016 to the Polish legal system a comprehensive system of regulations concerning the support of entrepreneurs who are in a crisis situation.

The basic premise of the new legislative act was to change the perspective on this issue – the principle was to First, providing assistance to an economic operator in order to stay on the market while respecting creditors' rights, and ultimately bringing it to an end. Has this assumption been implemented during the duration of this law?

The author refers to this issue in this study, indicating which provisions of this regulation have worked in practice during the three years, and which need to be changed to new or modified, while calling for improvements in restructuring processes.

1. Introduction

The new legal model should, in principle, be assessed positively, but the assessment of the three-year practice of applying it shows the need for certain modifications to the existing solutions. The need to amend the law was also recognised by the legislator himself, introducing new regulations on, for example, public aid issues[2].

The main obstacle to the popularisation and success of restructuring processes is not the imperfect law, but the economic factor of the problem of obtaining sources of financing for the current business by the restructured entity.

In the author's view, it would therefore be justified to create legal instruments encouraging financial institutions to prepare dedicated solutions for entrepreneurs in the crisis.

It also has a negative impact on the spread of restructuring over time in court proceedings, in particular second-instance proceedings.

A visible trend is the need to concentrate restructuring proceedings in courts specialised in conducting such proceedings and to exclude consumer bankruptcy cases from the jurisdiction of insolvency courts.

First, – the three-year period of the restructuring law should be assessed and the assumptions which accompanied the authors of the Act should be addressed. The previous regulations, contained in the Bankruptcy and Recovery Law, required adjustments to the changing reality.

Provisions were needed to respond quickly and early to the deteriorating situation of the entity before it was in a situation resulting in a permanent insolvency.

The lack of a coherent system of incentives for debtors to implement sanitisation procedures was a suffrage of the existing regulations so that their situation would not become irreversible.

2. New legislative solutions

2.1. Separation of insolvency and restructuring proceedings

The new look of the legislature is evidenced by the separation of restructuring and bankruptcy proceedings as independent and equivalent procedures.

The legislator assumed that the application to open the restructuring procedure would not be able to lead to bankruptcy, as well as the failure of the arrangement procedure would not automatically result in bankruptcy[3].

For the assessment of the entrepreneur by the counterparties, an undisputed significant difference is the presence of the trader in the market as a restructuring entity rather than in bankruptcy. Another significant change was the modification of the definition of the legal concept of insolvency.

In the previous legal regime, the insolvent was the one who did not pay two commitments to two different creditors, regardless of the amount of debt or the reason behind the backlog.

Thus, insolvency may have resulted in the declaration of bankruptcy of the debtor on the initiative one the creditor, even if his claim was relatively small and disproportionate to the amount of the debtor's turnover. Under the New Bankruptcy Law[4] the debtor is insolvent if he has lost his ability to execute his due cash liabilities.

This definition refers to the economic assessment of the debtor’s situation, second the plan moving the formal side of the concept of insolvency.

The legislator introduced a moveable presumption that the debtor had lost his or her ability to carry out his or her required monetary liabilities if the delay in the execution of the cash liabilities exceeds three months.

second the time frame, which establishes the insolvency of the debtor, is a presumption[5], according to which a debtor who is a legal person or an organisational unit without legal personality is insolvent also when his or her monetary liabilities exceed the value of his or her assets and that condition is maintained for a period exceeding twenty four months.

Of which second the case was considered that the temporary advantage of liabilities over the value of the debtor's assets should not necessarily constitute a basis for declaring bankruptcy, as it could result from the specific business characteristics of the debtor, for example at an initial stage with a high level of investment commitment.

2.2. The role of creditors in the proceedings

The new regulations provide for an increase in the influence of creditors on the conduct of proceedings and a reduction in the role of the court and the Commissioner-judge.

In the previous legal regime, creditors could not effectively demand the appointment of councillors and the council itself was not equipped with effective instruments of action.

The increase in the powers of the board of creditors is reflected in the equipping it with new powers, for example, it can lead to a change in the person of the supervisor or administrator[6] or grant permission to exercise the ordinary management of the debtor[7].

The creditor board shall have the deciding vote when approving the key activities of the debtor or the manager, including the transfer of ownership of the property or the right to secure a claim not covered by the contract, the imposition of the components of the contractual or sanctioning mass by other rights, the taking of loans or loans, or the conclusion of the lease agreement of the debtor undertaking or its organised part or other similar agreement.8 There is no doubt that the position of in-kind secured creditors is assumed to be privileged, but this should not be an unlimited advantage.

In the previous legal regime, the non-approval of such a creditor for restructuring could have led to its failure, since even if a deal was made with the other creditors, execution to the debtor could have been initiated and even initiated at the stage of the proceedings.

According to the new regulation, the in-kind creditor still has to agree to the arrangement of his claim in all four restructuring proceedings, however, a partial derogation was introduced from this principle[9].

Furthermore, in the sanctioning procedure, creditors, including the person concerned, lose their right to address the debtor’s assets as part of the sanctioning mass during the investigation period[10]. The possibility of execution in the course of the accelerated arrangement procedure and the arrangement procedure was also limited to the subject of the safeguard.

2.3. National Debt Register

Another step in strengthening the functioning of the new restructuring procedure model is the creation of the National Debt Register. EU Member States have undertaken to operate on their territory at least one register in which information on insolvency proceedings is to be published[11].

Adopted[6] December 2018 National Debt Register Act[12] performs this obligation. The bill in force serves at the same time the materialization of a specific under Article 5(2) the restructuring law of the obligation to establish a Central Register of Restructuring and Failure.

As a general rule, the regulations are to function from 1 December 2020

The National Debt Register is to be a register kept by the Minister of Justice in an electronic system in which data will be disclosed, inter alia, by:

1) natural persons, legal persons and organisational units which are not legal persons to which the Act confers legal capacity– to which they are or have been subject:

• (a) restructuring within the meaning of the Act Restructuring law,
• (b) bankruptcy or secondary insolvency proceedings,
• (c) completed by a final decision to ban economic activities[13],
• (d) the recognition of the decision to initiate foreign insolvency proceedings;

1. the shareholders of commercial companies who are liable for the company's obligations without limitation with all their assets, if the company is declared bankrupt, secondary insolvency proceedings have been initiated against the company or the company's bankruptcy application has been rejected[14].

The National Debt Register will therefore constitute a public and publicly available source of information on the entities to which the restructuring procedure has been implemented and will serve creditors by providing access via the IT system to the restructuring and bankruptcy proceedings.

The register is also intended to provide for the disclosure of a wide range of data on ongoing restructuring and bankruptcy proceedings in order to increase the transparency of these proceedings, as well as to improve the supervision by the creditors of the judge-commissioner of the judicial supervisor, administrator or receiver.

Act of 6 December 2018 o National Debt Register introduces an obligation in restructuring proceedings and in bankruptcy proceedings to submit applications and documents by electronic means, allowing the automatic processing of data by the electronic system for their further use, inter alia, in order to automatically transfer data from an application submitted by electronic means to repertorias and the models of the rules of the court and the committee judge created in the case.

In turn, the introduction as a rule of electronic service, the conduct of restructuring and bankruptcy proceedings in electronic form and the provision of access through the creation of a publicly accessible web portal is intended to accelerate the communication of participants to the court.

Bankruptcy and restructuring proceedings will be carried out in the electronic system and all judgments will be recorded in the electronic system. Letters and documents submitted by the Syndychor, the Judicial Supervisor and the Administrator shall be submitted only through the electronic system.

Furthermore, the Act provides that procedural documents and documents in the above proceedings will be created and submitted using forms made available in the electronic system by the judiciary.

3. Types of corrective actions and their characteristics

The legislator predicted four options for resolution[15]:1. approval procedure,2. accelerated systemic procedure,3. systemic proceedings,4. sanatorium proceedings.

3.1. Procedure for approval of the system

The procedure for approving the agreement is the simplest of restructuring procedures in terms of time, procedure and degree of involvement of the court.

The debtor retains considerable control over the company as well as the course of the proceedings, elects the arrangement supervisor, prepares draft arrangement proposals and votes creditors over the content of the arrangement.

This procedure works at an early stage of the crisis and can be initiated if the sum of the claims in dispute entitled to vote is at a level higher than 15%16. The role of the court is limited to the approval of the arrangement adopted by the creditors.

After voting on the agreement, the debtor shall apply to the court for its approval, accompanied by a report from the arrangement supervisor, which shall form the basis for assessing the feasibility of the arrangement.

Court within two weeks shall approve the arrangement and after the finalisation of the provision in this case the debtor shall recover the solvency and proceed to the implementation stage.

Procedures for approval of the arrangement are authorised to negotiate with the debtor outside of the rigors of judicial proceedings and without security for the debtor's assets. After the final approval of the arrangement, the creditor shall have the tools to control the debtor through the performance supervisor.

In the opinion of the author, this procedure from the point of view of the creditor also has some deficiencies – for the approval of the arrangement the required capital majority is 2/3 creditors entitled to vote on the arrangement – in the remaining restructuring proceedings, the majority is calculated by subtracting the voting creditors.

There is therefore a risk that the arrangement may be adopted when more than 1/3 creditors will vote against or not vote at all. second the disadvantage is that creditors are not entitled to remedies for the inventory of claims, which also does not constitute an enforcement title.

For the debtor, the procedure is to be able to prepare contractual proposals and collect the votes of creditors independently without the participation of the court. Votes shall be collected in writing without the need for a notary[17].

Another advantage is to leave the debtor the power to manage the assets and perform any management activities, including activities exceeding the ordinary management.

Due to the confidentiality of the pre-trial procedure and the relatively short period of court approval, information on the deterioration of the debtor's situation is not widely known, allowing his reputation to be maintained on the market.

From the debtor's perspective, the disadvantage is the lack of protection of the debtor's assets against recovery, as the security rules do not apply in the procedure for approval of the arrangement.[18], Therefore, executions cannot be suspended or bank account occupations repealed.

This allows creditors to execute them without restriction until approval of the arrangement, as only after approval of the arrangement of enforcement proceedings are suspended and enforcement is inadmissible. During the pre-trial stage, creditors may also terminate contracts, such as leases or leases, or financing contracts.

In the case of capital companies, the fact that the choice of the arrangement supervisor and the arrangement date do not affect the release of the debtor’s board of directors from compensation should be considered as detrimental to the debtor.

The time pressure in this procedure is a practical limitation – the debtor only has three months after the agreed settlement date for the meeting of votes and the preparation together with the arrangement supervisor of the application to the court for approval of the agreement.

Compliance with this deadline may be significantly impeded with the distributed structure of the claim.

Conclusions de lege ferenda

Despite the simplified and favourable procedure of the debtor, this type of proceeding is popular, which appears to be due to a lack of protection of the debtor from the execution of creditors at the pre-judicial stage.

It would therefore be appropriate to introduce such protection by suspending and prohibiting new executions, as is the case after the agreement has been approved.[19].

In order to improve the conduct of the procedure itself, there are also requests of an organisational nature – instead of sending a registered letter, it is worth introducing the possibility for the debtor to personally deliver voting cards to the creditor's hands, or to empower the arrangement supervisor to publish the notices provided for in the procedure for approving the arrangement to the order of the court (to be transmitted electronically).

3.2. Rapid Systemic Procedure

Accelerated arrangement proceedings may be conducted where the sum of the claims in dispute giving rise to voting on the arrangement does not exceed 15%20. The debtor may enter into an agreement with the creditors after a simplified statement of claims has been drawn up and approved.

The first priority in this procedure is to conclude an agreement as soon as possible, so a number of facilitations have been adopted in it – the court should decide to open proceedings within one week of the date on which the application was lodged[21].

When opening proceedings under this procedure, the court shall appoint a judicial overseer who shall notify the creditors of the opening of the restructuring procedure and shall draw up and submit to the judge-commissioner within a time limit two weeks from the date of opening of the procedure: restructuring plan, list of claims and list of disputed claims[22].

Approval of the census shall take place at a meeting of creditors convened to vote on the arrangement and the right of creditors to object has been excluded to speed up proceedings.

In principle, the opening of an accelerated arrangement procedure deprives the debtor of the exercise of the management board, with the exception of activities which exceed the scope of the ordinary management board for which it is necessary to obtain the consent of a judicial supervisor[23].

Creditors receive a decision on the adoption and approval of the arrangement much more quickly and can therefore expect the effects of the implementation of the arrangement or, in the event of a negative assessment of the debtor's situation, take suspended enforcement proceedings. Enforcement proceedings concerning claims not legally covered by the arrangement may be suspended for a period of time 3 months and the creditor in kind secured against the debtor's assets may, after the expiry of the period, execute only on the subject of the security.

As a disadvantage, it should be pointed out that the claim cannot be objected to in the register of claims, which means that the creditor is not entitled to contest its amount or omission. Once the proceedings are opened, the debtor gains the protection of the assets in the form of a suspension of enforcement proceedings relating to claims covered by the law and their initiation after the opening of proceedings is inadmissible.

On the other hand, the possibility for the supervisor to express ex post consent to activities beyond the normal management should be positively assessed, which eliminates the risk of decision bottlenecks in the course of the current business.

Conclusions de lege ferenda

In summary, the experience of accelerated systemic procedures has come to conclusions for the future. First, it appears appropriate to extend the two-week deadline for drawing up and submitting a list of claims to the judge-commissioner so far in order to provide creditors with an opportunity to carefully assess the amount of claims.

In an accelerated arrangement procedure, creditors may avail themselves of an institution of opposition, and the claims indicated by creditors may find their expression only at the meeting of creditors when an updated list of claims is submitted.

In order to verify the debtor's payment capacity, a practical solution would be to introduce an obligation for the debtor to pay an advance payment when issuing an order to open an accelerated arrangement procedure to cover the costs of proceedings. It would also be appropriate to regulate the ‘lost’ of enforcement proceedings where the creditor in kind is also executing assets that are not covered by the collateral.

3.3. Systemic management

The arrangement procedure serves to restructure a debtor undertaking which does not meet the criteria to initiate it two the above mentioned proceedings. It may be initiated against a debtor whose disputed obligations to vote on the agreement exceed 15% the total amount of its liabilities[24].

The arrangement procedure, given the difficult situation of the debtor, takes longer than the procedures described above. The lodging of an application for a contractual procedure allows for the suspension of enforcement proceedings against the debtor and the repeal of the seizure of his bank accounts before the court has examined him.

The opening of the arrangement procedure is dependent on the debtor’s being able to meet the costs of proceedings and obligations arising from the opening.

To this end, the debtor must demonstrate that he has the means to cover these expenses or that he is either achieving or achieving revenue that will enable him to do so, which should be reflected in the data on the activities of the debtor[25].

Once the arrangement procedure is opened, the debtor's assets become a contractual mass and the debtor is not able to meet the obligations covered by the arrangement or to charge his assets. In principle, the debtor retains the management of his own assets, but under the control of the judicial supervisor.

However, the court may appoint an administrator in the event of a breach of the debtor's applicable management law, failure to exercise the orders of a judge-commissioner or administrator, or where it is clear that the way in which the board is exercised does not guarantee that the arrangement is implemented in the future.

After opening the arrangement procedure of the supervisor within the time limit thirty days shall draw up an inventory to determine the composition of the mass and to estimate the value of the mass components. Within the same period, the supervisor shall submit a restructuring plan and a list of claims.

Creditors have a real impact on the proceedings under the creditor board[26]. The Judge-commissioner may appoint a board of creditors of his own motion, at the request of the debtor or at least third creditors or creditors or creditors having in total at least one fifth part of the sum of the receivable.

The task of the board is to control the activities of the judicial supervisor and to give consent to the activities which can only be carried out with the permission of the board of creditors. The board of creditors shall also issue an opinion at the request of a judge-commissioner, a judicial overseer or a debtor.

An important advantage of the arrangement procedure is, in principle, to leave the management of the company in the hands of the debtor, limiting the risk of being transferred to extreme situations by the court.

It is beneficial for the debtor to suspend enforcement of the contractual claims at the time of the opening of the arrangement procedure and to prohibit the initiating of new executions.

Conclusions de lege ferenda

In the arrangement procedure, it is critical for the author to assess the method of financing a judicial supervisor who can collect remuneration (in the form of advance payments) only after approval of the census of claims, which means a multi-month wait for remuneration. For the future, it would be advisable for a judicial overseer to receive an advance upon filing a statement of claims, not only after its approval by a committee judge[27].

3.4. Sanction proceedings

Of the four restructuring procedures, sanation proceedings are the most radical for the debtor and the closest to insolvency proceedings. He may be the only one to be initiated against the will of the debtor[28], which is at the request of a personal creditor in the case of insolvent legal persons.

It is intended to conclude an agreement with creditors, but using instruments typical of insolvency proceedings.

An example of such an instrument is the principle of depriving the debtor of the board of directors of his own assets, although it should be mentioned that there is, with the agreement of the court, the possibility of leaving the debtor of the ordinary board of directors in the hand.

Another solution to close insolvency proceedings is the possibility to dispose of unburdened assets[29], which accelerates the sale of such assets and does not affect the rights of the material creditors.

An instrument that facilitates the resolution of debtors' contractual obligations is the possibility to depart from mutual agreements regardless of the procedure they set out to terminate the contract in advance.

Court, administrative, administrative and amicable proceedings concerning the sanctioning mass may be initiated and conducted solely by the administrator or against him.[30]. The administrator conducts these proceedings in his own name for the debtor – he is the so-called replacement party.

The rules for the replacement of the debtor by the syndic and the sanatorium administrator in a particular proceeding are the same.[31], and, therefore, the jurisprudence and position of the doctrine regarding the functions of the syndicate can be fully used in explaining the role of the administrator in the criminal proceedings[32].

It is therefore worth recalling the Supreme Court ruling from 16 January 2009[33], in the explanatory memorandum that it is explained that the procedural substitution of the syndik in place of the fallen one is an absolute basis with which the procedural legitimacy is only a substituted entity.

In the doctrine, however, it is argued that in pending judicial or administrative proceedings, the syndicate is a party in a formal (trial) sense, whereas in a material sense the debtor is the party itself[34].

In principle, the recovery procedure should take up to one year, although the specific situation of the debtor may require a longer procedure.

The determination of the time limits of the sanctioning procedure and the granting of protection against execution at that time aimed at bringing the debtor undertaking into financial condition to bear the costs of the arrangement at the time of its approval.

The measures provided for in the restructuring plan are intended to enable the legal relationship between the debtor to be redesigned in order to restore its ability to regulate obligations.

Sanction proceedings shall equip the debtor with radical legal instruments, allowing him to waive any contract that is not acceptable to him, regardless of the procedure for early termination of the contract.[35], as well as termination of employment contracts with employees who are protected from termination, e.g.

in the pre-retirement period. A favourable solution for the debtor is the possibility to sell assets of the debtor in a burden-free state, which facilitates the disposal of unnecessary assets. The possibility of ineffective legal acts carried out by the debtor within one year before the date on which the application was lodged, e.g.

the establishment of safeguards on its assets, despite a lack of direct link with the debtor's receipt of the benefit, serves to release the debtor's assets from adverse and excessive collateral. However, indicate second medal side – loss of full control of the company by deprivation or radical limitation of the management of its debtor.

In turn, the inadmissibility of execution creates a fear of cooperation with debtors forces prudential solutions, for example, in the form of prepayments, which hinders the ongoing functioning of the debtor's company, or the acquisition of financing in the form of credit or loan.

The decisive role in the sanctioning procedure lies in the hands of creditors who at the assembly decide to accept or reject the arrangement[36]. It is therefore up to them to decide in what form the arrangement will be adopted, so they can make its wording binding.

Proposal ide lege ferenda

In assessing the existing measures in the area of sanatorium proceedings, there is a suggestion to remove the obligation to obtain the consent of the judge-commissioner[37] for the sale of an asset as provided for in the restructuring plan, if it has already been approved by the Commissioner-judge, so that the court does not duplicate its activities. In the author's opinion, it would also be useful to introduce the possibility of extending, if necessary, the time limit for drawing up the inventory of claims (currently this is 30 (days) that document giving rise to the vote at the assembly or the determination of the scope of the arrangement should be drawn up fairly and precisely, which will reduce the risk of objections and will therefore speed up the procedure[38].

4. Characteristics of restructuring proceedings in years 2016-2019

The restructuring procedure to prevent the declaration of bankruptcy of the debtor by allowing it to restructure by means of an agreement with creditors has actually been implemented since 2016 By summing up the operation of new solutions in years 2016-2018, the following analysis of the nature and number of proceedings initiated, as well as the characteristics of the entities involved and the local circumstances.

4.1. Number of proceedings initiated per year[39]

In 2015 published in the Judicial and Economic Monitor 7,354 announcements, including 750 about the bankruptcy of entrepreneurs 2,112 on consumer bankruptcy.

In 2016 in the Court and Economic Monitor[15] 265 notices relating to ongoing insolvency or restructuring proceedings, including 4,434 relating to consumer bankruptcy,606 – bankruptcy of entrepreneurs, and 212 – the opening of a contractual or sanitisation procedure in the framework of the restructuring procedure.

In 2017 published 23,995 notices relating to ongoing insolvency or restructuring proceedings, including 5,535 concerning the declaration of consumer bankruptcy, 591 – bankruptcy of entrepreneurs, and 348– the start of the restructuring procedure.

In 2018 appeared in the Judicial and Economic Monitor[29] 218 notices relating to ongoing bankruptcy proceedings, including 6,570 concerning the declaration of consumer bankruptcy, 615 – bankruptcy of entrepreneurs, and 465 – the start of the restructuring procedure.

To[28] February 2019 published in the Judicial and Economic Monitor 5,449 notices relating to ongoing insolvency proceedings, including[1] 207 concerning the declaration of consumer bankruptcy, 116 – bankruptcy of entrepreneurs,a 76 – the start of the restructuring procedure.

Based on statistical analysis (see graph no. 1 and Table No 1) we are seeing an upward trend in the number of restructuring proceedings initiated, which shows an increasing interest in this procedure.

Figure No 1 – comparison of the number of insolvency and restructuring proceedings in years 2015-2018

Table No 1 – Number of proceedings against entrepreneurs in crisis in years 2015-2019

4.2. Analysis of statistical data for 2016

In the first the year of application of the new regulations was initiated 216 restructuring proceedings (see table no. 2), in which the debtors most frequently applied for restructuring under the accelerated arrangement procedure.

Table No 2 – types of restructuring proceedings initiated In 2016

On the other hand, the analysis of the ownership structure of the entities benefiting from the restructuring procedure shows (see table no. 3), that In 2016 The majority of proceedings initiated concerned companies from o.o. and entrepreneurs conducting individual economic activities.

Table No 3 – number of initiating In 2016 proceedings on account of the ownership structure of the restructured entities

In turn, the analysis of initiating entities In 2016 The restructuring procedure in terms of the subject matter of their activities (economic divisions) indicates that the most of the proceedings (see table no. 4) concerned entities that had been active in construction, industrial processing and trade. This is due to the greatest popularity of these economic departments, but with second it also demonstrates the scale of the risks associated with the industry.

Table No 4 – number of initiating In 2016 procedures for the classification of PKD

4.3. Analysis of statistical data for 2017

In 2017, As in the previous one, the debtors were most eager to apply for restructuring (see table no. 5) in the framework of an accelerated arrangement procedure.

Table No 5 – types of restructuring proceedings initiated In 2017

Analysis of the ownership structure of the entities benefiting from the restructuring procedure In 2017 imaging (see table no. 6), that the most initiated proceedings concerned companies from o.o. and entrepreneurs conducting individual economic activities.

Table No 6 – number of initiating In 2017 proceedings on account of the ownership structure of the restructured entities

As for economic departments, these are the most cases (see table no. 7) it concerned the restructured operators involved in industrial processing and trade. Compared to 2016 the number of restructured construction operators has decreased, reflecting the improvement in the situation in this sector.

Table No 7 – number of initiating In 2017 procedures for the classification of PKD

4.4. Analysis of statistical data for 2018

In 2018 Unappealably the most popular type of procedure (see table no. 8) an accelerated systemic procedure.

Table No 8 – types of restructuring proceedings initiated In 2018

Analysis of the ownership structure of the entities benefiting from the restructuring procedure indicates (see Table no 9), that In 2018 The most opened proceedings concerned entrepreneurs conducting individual business activities and companies with o.o. In previous years, companies from the O.O. were leading; In 2018 This trend has been hampered by an increasing number of individual business restructuring applications.

Table No 9 – number of initiating In 2018 proceedings on account of the ownership structure of the restructured entities

Most Initiated In 2018 proceedings, similar to In 2017, for restructuring entities (see table no. 10), which dealt with industrial processing and trade. Similarly, the number of restructuring entities in the construction sector has developed, reflecting the stabilisation of the sector.

Table No 10 – number of initiating In 2018 procedures for the classification of PKD

In 2018, the largest shares of restructuring proceedings were initiated in the Wielkopolskie Voivodeship (17.85%) and the Mazowieckie Voivodeship (15.050%), with the Śląskie Voivodeship in third place (12.040%). The pattern was similar in 2017 (Mazowieckie: 16.67%; Śląskie: 14.080%), whereas in 2016 Mazowieckie (18.4%) and Śląskie (17.92%) led the ranking.

The new restructuring law applies from 1 January 2016 In summary, the three-year duration of the Act should be positively assessed for the implementation of restructuring solutions as a form of improvement in the situation of the entrepreneur in the crisis.

The restructuring procedure has become a concrete alternative to systemic bankruptcy[40]. Among the legislative solutions, it is particularly appropriate to assess the departure from the obligation to submit claims and the task of drawing up a list of claims by the administrator or judicial supervisor in cooperation with the debtor.

This allowed for a significant acceleration of the determination of claims while ensuring that one the active role of the debtor, and from second– the current inspection by the administrator or supervisor.

It seems surprising that the debtors have little interest in approving the arrangement, the reasons for which can be seen in the lack of protection of the debtor from recovery, and therefore the introduction of a timely safeguard period should also be considered.

However, the main obstacle to the success of restructuring processes is the economic element – the difficulty in obtaining sources of financing for the current business by the restructured entity.

Financial market institutions are very cautious in their intention to finance entities in the course of restructuring, assessing the risks associated with such an undertaking. second an element affecting the attractiveness of restructuring processes is the protracted length of judicial proceedings.

The new regulations contain some practical solutions to improve the dynamics of proceedings: a number of instructional terms for the court and the committee judge and procedural terms for the supervisor and the administrator, or a link between the remuneration of the supervisor and the administrator and the speed of proceedings.

However, despite a positive assessment of the solutions, they did not significantly and satisfactorily improve the dynamics of the proceedings. The reconciliation of speed and high level of content can be achieved by standardising repetitive actions[41], and effective implementation of ICT solutions.

Disparities between the various courts are notable, some of which are able to meet instructional deadlines[42], in particular at the stage of initiating the procedure, with a view to the order for urgent recognition of restructuring applications resulting from the Rules of Procedure of the General Court.

The length of proceedings is particularly felt at the stage of appeal proceedings, as while the average duration of first instance proceedings (especially accelerated arrangement proceedings) is satisfactory, the dynamics of proceedings is slowed down at the stage of appeal procedures.

The proposed trend is the concentration of restructuring proceedings in the largest courts specialised in conducting such proceedings.

second, However, it is important to exclude from the jurisdiction of insolvency courts to civil courts a consumer bankruptcy case which, by its mass nature, absorbs the bankruptcy court, significantly delaying its action in restructuring business cases.

In conclusion, after the end third The years of the restructuring law should be assessed positively, indicating that in years 2016-2018 more (263) than in years 2003-2015, i.e. during the period of operation of the Act Bankruptcy and Resolution Law. The success of the further dissemination of restructuring institutions will depend on the smooth implementation of ICT instruments, in particular the National Debt Register, as well as improving the dynamics of judicial proceedings.

______________________________________________________________________