Company restructuring plan in 30 days - is it possible?

PMR team

October 11, 2017

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According to the new restructuring law, any entrepreneur whose company is in difficulty can apply to the commercial court for protection from bailiffs, court executions and other actions of creditors, such as the blocking of money by banks, in order to restore the normal operation of the company and heal it. However, this is conditional on demonstrating the soundness of the company's restructuring through a plan, which must be submitted within... 30 days.

Is it possible, practical and responsible? We ask experienced PMR advisors Restructuring SA.

– In fact, there are slightly more conditions – says Sławomir Anisimowicz, Managing Director PMR Restructuring SA. – The company must negotiate, its activity must make sense and have an economic future, so that it can repay the debts of all creditors, and also be able to regulate current operating costs from current revenues after the date of opening the proceedings. Only in such a situation should the entrepreneur submit an application for restructuring to the commercial division of the competent district court. If his application, together with justifications, preliminary presentation of the situation, receivables, etc., is positively considered and the court accepts the restructuring application, appointing a judicial supervisor or administrator, a race against time begins. Within 30 days, the supervisor or administrator must provide a ready, detailed restructuring plan. It must include both a description of the enterprise, including the financial situation of the company, and an analysis of the reasons for the need to restructuring.

The key elements of the restructuring plan are also a description and schedule of the implementation of restructuring measures, a description of financing sources and information on production capacities. The restructuring plan is therefore a kind of compendium on the company and a plan of actions that will provide a chance for the company to function and repayment of liabilities to creditors. Repayment can be and usually is spread over time and depends on the successful implementation of the plan restructuring and further efficient management of the company.

The period of 30 days is actually very short, but when the company is in crisis, time is priceless and you have to act very efficiently. In addition, the legislator wanted this special legal protection not to be abused as a way to delay payments to creditors indefinitely.

What does this mean for the court-appointed administrator? Is one person able to prepare such a plan in such a short time?

This is the moment to sift the wheat from the chaff. The moment of truth as to whether the manager in question has the right human team with the right competence, experience and capacity to obtain the relevant data, analyse the situation and propose a solution. This is not a task for one person or for a small law firm. The size of the team is also not the only key to success. Depending on the type of crisis, very different competences and experience are needed.

The source of problems is not always finances, sometimes it is about fight for shares in the company, sometimes the company is blocked by unfair claims from tax offices, sometimes by trade unions and labor problems. Regardless of what is at the root of the crisis, these 30 days must be enough for everything.