The amendment of the Bankruptcy and Restructuring Law Act concerning new provisions on consumer bankruptcy has now become law. From January 1 2015 Polish consumers will find it much easier to restructure their debts. This should be a boon to consumers, but since "there is no such thing as a free lunch" the advantages for consumers will result in additional risks for their creditors.
The lower house of Parliament, the Sejm, has approved an amendment of the Bankruptcy and Restructuring Act. The amendment significantly alters the entire consumer (ie, non-business) bankruptcy process under Polish law. It is aimed at resolving the most problematic issues involved in consumer bankruptcy, which have plagued the procedure since its inception in 2009.
The Council of Ministers recently adopted a bill to introduce a new restructuring law. It is hoped that the proposed amendments will create a much friendlier environment for businesses in Poland and make the Polish economy increasingly competitive, by offering easier, cheaper and faster debt relief through advanced restructuring legal tools.
The Bankruptcy and Restructuring Act offers a new method for dealing with developer bankruptcy. The new methodology was introduced due to concerns that Polish bankruptcy law provided insufficient protection for people purchasing homes and apartments from developers. However, the regulations have turned out to be a source of even greater problems for clients than before.
Most entrepreneurs deal with a company in financial difficulties at some point of their business activity. However, all such actions run the risk of being found ineffective towards the bankruptcy estate (ie, towards all creditors whose common interest is represented in bankruptcy proceedings) should the restructuring fail and the contracting party be declared bankrupt.
The Warsaw common court recently concluded its first successful recovery proceeding - an emerging trend in Polish bankruptcy and recovery judicial practice. A new approach to recovery proceedings by this court, which handles the largest number of insolvency cases in Poland, will improve the chances of successfully initiating and completing such proceedings.
A recent spate of bankruptcies among entrepreneurs has clogged the courts with mounting cases, forcing many businesses to look to alternative measures for debt rescue. Therefore, an increasing number of courts are announcing their first successfully conducted recovery proceedings. A debtor that is willing to take on the additional costs and effort required for recovery proceedings can reap the benefits.
The ministers for justice and economy recently announced plans for a radical reform of bankruptcy law, aiming to allow businesses on the verge of bankruptcy to return to stable economic relations more easily. If properly applied, the proposed amendments should result in the Polish legal environment, and bankruptcy law in particular, becoming more enterprise-friendly and business-oriented, offering a true boon for investors.
This update considers the validity of a transfer agreement where one party instructs another to transfer funds to a third-party creditor when the instructing party is declared bankrupt before completion. The Supreme Court ruled that if the transfer has been accepted and executed before the date on which the transferor declares bankruptcy, the revocation of this agreement by the bankruptcy trustee is ineffective.
Judges who adjudicate in bankruptcy cases admit that, in practice, preparing a petition for bankruptcy within two weeks of the moment at which the company ceases to pay its debts, as the law requires, is extremely difficult. Many entrepreneurs often make mistakes, which effectively used to lead to such motions being dismissed by the bankruptcy courts - until recently.
Under Article 491(3) of the Commercial Companies Code, a company that is bankrupt, in liquidation or being divided, or whose assets are being distributed, cannot merge. Some commentators consider that a merger with a company in bankruptcy that has an option of settlement with creditors is possible in some circumstances; however, this opinion is not accepted by all commentators.
The dynamic Polish market is constantly seeking its own remedies for business ailments. Thus, new survival strategies are increasingly being developed and tested. This update looks at an instance of cooperation between a debtor and its creditors on an unprecedented scale in order to save the debtor's business.
One area of law that has substantially changed since the enactment of the Bankruptcy and Recovery Amendment Act in May 2009 is the course of bankruptcy proceedings envisaging the conclusion of an arrangement with creditors and the way in which specific creditors in such proceedings are treated. This update focuses on one specific form of securing receivables - a mortgage - in order to explain the changes more simply.
Including: Legal Framework; Types of Bankruptcy and Recovery Proceeding; Corporate Bankruptcy Proceedings; Corporate Recovery Proceedings; Personal Bankruptcy.
Parliament has adopted a new act amending the Bankruptcy and Recovery Law Act. The amendment includes changes that will have a significant impact on evaluating an entrepreneur's bankruptcy capability, access to recovery proceedings for entrepreneurs and the position of a creditor to which the bankrupt's property is transferred to secure its receivables.
Under the Commercial Company Code, during the liquidation process a company's assets must be converted into cash to pay off its debts. Therefore, the division of assets between shareholders relates only to those company assets that remain after creditors' claims have been satisfied or secured. However, in some cases the assets come to light only after the company has been deregistered and therefore no longer exists.
Significant changes to the Code of Civil Procedure have entered into force. The changes regarding collection proceedings are of particular interest to creditors as they determine how creditors may effectively enforce their rights against debtors receiving such financing.