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Proceedings for the modification of the arrangement Part 2

A second chance for your company In May this year, an introductory article on the PMR Restructuring S.A. website was published on the issue of proceedings for the change of arrangement. The presented topic met with your interest and revealed that not all entrepreneurs who are in the process of implementing an arrangement adopted in restructuring proceedings are aware of the existence of such a solution and the possibilities and benefits it entails. It should begin with an explanation of the consequences of a delay in the implementation of the approved arrangement, which may crystallise even in a situation where the entrepreneur has only one arrears in the payment of due arrangement instalments. In such a case, among others, the creditor and the supervisor of the agreement execution are entitled to file a motion for annulment of the agreement, the positive recognition of which causes the loss of all benefits under the agreement, including the earned redemption, and the entirety of the liabilities becomes immediately due and payable, including interest. It should be borne in mind that the approved arrangement is not, however, a final construction, which means that these difficulties do not [...]


02 July 2024

Restructuring processes of a company at risk of insolvency in cooperation with a restructuring advisor

In the context of restructuring law, the restructuring of a company refers to a process aimed at transforming and adjusting the financial, organisational or operational structure of a company in order to improve its financial health, efficiency or chances of survival. Restructuring law, as a set of rules and procedures, aims to help the entrepreneur go through the process to avoid bankruptcy. Let us remember that the purpose of restructuring proceedings, the objective under the law, is to avoid bankruptcy of the company. Restructuring proceedings are regulations on restructuring proceedings that offer companies tools to carry out the restructuring process. These can be special procedures such as arrangement proceedings, sanitation proceedings, accelerated arrangement proceedings, proceedings for the approval of an arrangement or consumer arrangements, or bankruptcy processes opened at the request of the entrepreneur, the so-called 'controlled bankruptcy' The main and most common objective of restructuring proceedings is the conclusion and approval of an arrangement with creditors. How to reach and achieve this process is a very individual matter. In each case resulting from the objective of the entrepreneur in question and his expectations. The process [...]


25 June 2024

Consumer bankruptcy - a chance for a fresh start

According to data published by the Central Economic Information Centre, 9184 people declared consumer bankruptcy in the first five months of 2024. This is the highest ever number of consumer bankruptcies in the history of the institution. What do these figures mean and what can we expect? The increasing number of consumer bankruptcies is mainly due to the difficult economic situation of many consumers who, having no other option, reach for - what may seem like - a last resort. Continuing inflation and rising prices of basic necessities mean that many people cannot afford their everyday living and therefore cannot service their debts, which are usually bank loans or credits. However, the latest figures also show that consumers are increasingly aware of the debt relief tools available to them, including the possibility of opening a consumer bankruptcy procedure. Thanks to the solutions offered by bankruptcy, consumers can count on debt relief to free themselves from financial problems that would otherwise [...]


20 June 2024

Negotiation with creditors in the restructuring process? Does mediation help to restructure the company?

Negotiating with creditors in a restructuring process refers to attempts to reach an agreement between a company (the debtor) and its creditors to restructure financial liabilities and improve the financial health of the company. The process aims to find a balance between the interests of the debtor, who wants to avoid bankruptcy, and the interests of the creditors, who seek to recover as much of their receivables as possible. To achieve the objective in the restructuring process, it is important to: 1. identification of financial problems: A thorough understanding of the company's financial situation is necessary before negotiations can begin. This includes an analysis of debt, liquidity, assets and liabilities. 2. Developing a restructuring plan: A restructuring plan should be presented, which includes proposals for changes in the terms of repayment of the debt, restructuring of the debt, possible write-off of part of the debt or other measures to improve the financial situation. 3 Consultation with creditors: The company - in our case it is often the RESTRUCTURING CONSULTANT - must make contact with creditors to discuss the restructuring plan presented. This may involve meetings, presentations and exchanges of information to understand and consider [...]


11 June 2024

Lease agreements in restructuring proceedings- a problem or a source of financing for the arrangement?

Leasing is one of the key sources of business financing in Poland, which is steadily gaining in popularity. According to data presented in a report prepared by the Association of Polish Leasing and EY-Parthenon, the Polish leasing sector is the fastest-growing market in the European Union, having increased sixfold over the past 18 years, and its current growth rate exceeds 10% per year. In 2023, the barrier of PLN 100 billion of investments financed through leasing in one year has been broken, which places Poland as the 5th largest market in Europe, as well as the barrier of PLN 200 billion of the value of assets in use by leasing companies' customers. According to the cited report, as many as 62% SME companies identify leasing as a key source of financing, resulting in a noticeably higher share of leases in the structures of receivables under restructuring proceedings. The main division is between operating leases and finance leases based on the ownership option and the distinction of which party to the contract is entitled to depreciation on [...].


04 June 2024

What are the benefits for the entrepreneur of entering into a simplified company restructuring process and why entrepreneurs fear it

Dozens of restructuring proceedings carried out and many hours of deliberation with entrepreneurs have enabled PMR Restructuring S.A. to develop a list of benefits of entering the simplified restructuring process: 1. retaining control over the financial situation: Simplified restructuring allows a company to approach financial problems in a professional and courageous manner and maintain control over the situation. We stop 'burying our head in the sand'; 2. Avoiding bankruptcy: Effective restructuring is the solution to avoid formal bankruptcy of the company, which in turn minimises the negative effects on the company's owners, employees, counterparties as well as shareholders; 3. Negotiations with creditors: The restructuring process enables negotiations with creditors to find sustainable solutions, such as debt reduction and restructuring of repayment terms; 4. Preservation of shareholder value: Avoiding formal bankruptcy preserves shareholder value, demonstrating that we can face up to the problem. Crisis management requires boards/owners/representatives to take a broader view and make bold decisions; 5. Protecting jobs: Simplified restructuring affects the cost structure which helps to preserve jobs by reducing costs [...]


28 May 2024

Re-arrangement proceedings part 1

The opening of restructuring proceedings is the first step on the way to regaining liquidity and avoiding bankruptcy, and the acceptance of the arrangement and its final approval is the moment when the Entrepreneur can finally breathe. Firstly, as a rule, as of that date, the maturity dates of debts covered by the arrangement are changed, as well as the manner of their repayment and often also the amount in connection with a partial write-off of liabilities. Secondly, in the case of legal persons, their representatives (Management Board) are released from liability for such liabilities. Thirdly, what is worth emphasising - the arrangement so adopted does not have to be a final construction, as the Act provides for the possibility of its later modification within the framework of an arrangement modification procedure. The arrangement designed in the proceedings is a projection of at least several years, the assumptions of which are made during the period of the proceedings, taking into account the possibilities and conditions that are known or foreseeable at that stage. Unfortunately, recent years have shown how much and how quickly the political, economic and administrative environment can change [...].


14 May 2024

Restructuring - a way for local government companies to get into trouble

The wave of insolvencies in the country is creeping up. In the first quarter of this year, 1,537 companies reported it, 31 per cent more than a year ago, according to Coface. The driving force, however, is not bankruptcies, but restructuring proceedings to prevent them. In Q1 2024, as many as 1,537 decided to do so, 33 per cent more than a year ago. So far, these have mainly been private companies. However, public companies, including local authorities, are starting to join the list. Pursuant to the decision of the District Court in Wałbrzych, 6th Commercial Division, of 29 June 2020, the first restructuring proceedings in the region were opened against Przedsiębiorstwo Komunikacji Samochodowej w Kłodzku S.A.. After four years, the restructuring was successful. Last week, the court in Walbrzych approved the arrangement adopted at the creditors' meeting. According to experts, this is a breakthrough verdict, which may encourage more local government companies to undertake restructuring activities. Especially as many local government companies are generating losses and their liquidity is poor. - [...]


08 May 2024

What are the characteristics of good cooperation between an Entrepreneur and a Restructuring Advisor. How to choose a Restructuring Advisor? Do we wait until the Court appoints someone?

   There are many benefits to an entrepreneur working with a restructuring adviser, especially when a company is facing financial difficulties or wants to avoid potential problems in the future. Here are some of the key benefits: 1. professional analysis of the financial situation: The restructuring advisor analyses the company's finances, helping to identify the causes of the financial problems. This enables effective solutions to be implemented. If there is a threat of insolvency or a state of insolvency, the Adviser will make a recommendation on further action, including proposing the type of restructuring procedure appropriate for the current crisis situation; 2. Development of a restructuring plan: The Adviser will help develop a comprehensive restructuring plan, which may include debt restructuring, changes to the company's operational structure, cost optimisation and other recovery strategies. 3 Negotiation with creditors: A restructuring adviser can negotiate with creditors on behalf of the business, seeking more favourable debt repayment terms, which can be key to improving liquidity. 4 Preventing bankruptcy: Early application of restructuring measures can prevent a company from going bankrupt. The adviser will help implement strategies that will enable the company [...]


23 April 2024
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