Day 22 March 2024 The Supreme Administrative Court issued a judgment (reference no. III FSK 4654/21), in which it stated that the tax authorities were not required to make arrangements for the conditions for the declaration of bankruptcy to appoint accounting experts to establish the fact and date of insolvency if the evidence was sufficient to establish the facts in question.
The basis of liability for the lack of timely submission of an application for bankruptcy, among others, of the members of the board of directors of sp. z o.o. for its tax obligations is established Article 116 Tax Ordinance (so-called liability of entities third), in respect of liabilities to other creditors, this is appropriate Article 299 ksh (for sp. z o.o.) and Article 21 bankruptcy law on other entities.
The common denominator of these regulations is:
liability to creditors, among others, members of the board of directors, shareholders – anyone who under the law, company agreement or statutes has the right to conduct and represent such an entity for lack of a timely application for bankruptcy;
exonertial conditions, i.e. conditions after fulfilment of which the person concerned is not liable for failure to submit an application for bankruptcy, inter alia, of a commercial law company, i.e.
(the simplest way) to file a bankruptcy application on time; to demonstrate that a restructuring procedure has been opened (or an agreement has been approved in the procedure for approval of the arrangement) has been filed on time; to demonstrate that the insolvency was established at the time when the debtor was executed by the forced board or by the sale of the undertaking.
The statutory deadline for filing an application for bankruptcy is 30 the days from the date on which the ground for bankruptcy was established (i.e. insolvency).
It is also important to understand the extent to which such persons are liable, and they are liable to creditors for damage caused by failure to file an application within the time limit, with the presumption (inferiable) that the damage covers the amount of unmet claims of the creditor concerned against the debtor.
The extent of such liability should be determined on the difference between what such a creditor received in the insolvency proceedings of the debtor initiated as a result of the submission of a ‘delayed’ bankruptcy application and what he would have received if the bankruptcy application had been filed on time (for bankruptcy funds would have been larger).
The NSA judgment seems to have left out in its entirety the responsibilities of such an entity.
In civil proceedings brought by creditors, e.g.
against former or current members of the company's board of directors, an expert opinion on accounting is necessary in order to (a) establish the moment of the insolvency and to determine whether there has been a statutory deadline for the submission of an application for bankruptcy and (b) establish the responsibilities of such persons.
In the judgment in question, the NSA concluded that the tax authority is obliged to use this evidence [expert opinion, ed.] in a case of complex facts which can only be explained if special information is available. It seems that he has accepted a priori that tax authorities already have expertise in accounting and bankruptcy law.
The NSA also pointed out that the functions of enforcement proceedings in the case were carried out by insolvency proceedings, which are referred to as universal (general) executions, as opposed to single (traditional) executions conducted under the provisions of the Civil Procedure Code or the Law on Enforcement in Administration.
The conduct and termination of insolvency proceedings in order to liquidate the debtor's assets (S. sp. z o.o.) by dividing the bankruptcy mass and then deleting the company from the Register of Entrepreneurs of the National Court Register, makes the ineffective execution of the case obvious.
In so far as insolvency proceedings can be regarded as ‘general execution’, it concerns all creditors and not only one, the opening of insolvency proceedings (even late), the liquidation of the debtor's assets and the satisfaction of creditors (even partially) does not mean ‘ineffective execution’ within the meaning of Article 116 or Article 299 ksh.
Such insolvency proceedings are properly conducted.
Only the dismissal of an application for bankruptcy (delayed or not) as a result of the Court’s finding that the assets of an insolvent debtor are not sufficient to satisfy the costs of the proceedings or only sufficient to satisfy those costs is equivalent to the condition that the execution is unsuccessful.
Moreover, only at the end of the insolvency proceedings is it possible or, if so, to what extent, the creditor will be satisfied and which has an impact on the liability of the debtor on the basis of Article 21 P.U., Article 299 ksh, or Article 116 o.p.
The NSA judgment may appear to be quite controversial by unfairly preferring a public creditor (tax offices) to other creditors, by law that the tax authority arbitrarily determines the moment when the debtor becomes insolvent and thus establishes its liability, in principle and, above all, b) establishes the extent of such liability in full (i.e. in the amount of the tax liability, less what the tax authority received in the course of insolvency proceedings, while the application for bankruptcy could have been filed within the time limit or the scope of responsibility of such entities could have been less and which is also not the subject of analysis in insolvency proceedings.