PMR Restructuring analysis - Companies need not fear fraudulent bankruptcy filings

The new Insolvency and Restructuring Law, in operation since 1 January 2016, has given a real possibility to defend against bankruptcy filings by unfair competition or as blackmail. This is a significant change that allows honest companies to defend themselves more effectively against the informational consequences of such a request and the loss of their good image.

The entry into force of the new Bankruptcy and Restructuring Law at the beginning of this year regulates not only actual bankruptcies and company restructurings, but also bankruptcy petitions that are wrongfully filed by dishonest creditors in order to harm the company.
A typical example would be when a service provider fails to properly fulfil its contract, but demands payment from the principal for the service. The companies enter into a dispute, which is resolved either through amicable talks or litigation. Sometimes, however, an impatient service provider, in order to force its principal to pay what it owes and end the dispute, files a bankruptcy petition against the company with the court while informing customers, sometimes through the media, sometimes even through direct contact with the company's customers and clients, that the company is bankrupt.

Such action often results in serious damage to the company's image. News of the bankruptcy filing appears in the media and for many contractors, unfamiliar with this type of practice and the details of the bankruptcy process, only two words count - company name and bankruptcy.

- explains Malgorzata Anisimowicz.

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19 October 2016:
" Companies need not fear fraudulent bankruptcy filings - PMR Restructuring analysis