The recent example of Atlantic proved that, once again, the Polish culture of liquidation has won out over Western restructuring practice. However, as European experience confirms, restructuring proceedings are much more effective than bankruptcy. This makes it all the more surprising that Polish entrepreneurs are ignorant of the methods and procedures of judicial restructuring.
Early initiation of the procedure allows for obtaining court approval and an agreement with creditors, which enables the companies to continue their operations, maintain their value and maintain jobs and satisfaction of creditors. However, the arrangement method of resolving crises in companies is for unknown reasons particularly badly perceived by employees and officials who strive for liquidation bankruptcy at all costs (de facto seeing in it, wrongly, greater benefits than in the case of an arrangement). Therefore, the most common nail in the coffin of many companies is the late submission of an application for arrangement and lack of practical knowledge of restructuring law and its possibilities. Restructuring and arrangement are simply frightening people, while they provide the greatest chance of reconciling the interests of the various parties to the proceedings and saving the value of the company, and therefore are more profitable for everyone.
In the case of Atlantic, the Court, having access to all the evidence, ultimately decided, based on its professional experience, to liquidate the company. Undoubtedly, the basis for such a decision is primarily the current actual financial condition of the company and the presented assumptions of the recovery plan and arrangement proposalsThe most common reason for the lack of acceptance for proposals The problem with the arrangement is their incorrect construction. Wishful formulation and, unfortunately, still imaginary conjuring of reality consisting in fact of unsubstantiated claims - which results in dismissing the application for such court protection. Currently, Bankruptcy Courts are able to reliably, with an economic eye, assess the professionalism of the presented restructuring architecture. Therefore, it is better if the debtor does not try to write an application for an arrangement himself (templates of procedural documents are a bad idea) - because he will learn from his own mistakes. It is safer when the debtor supports himself with professional help, who, before preparing the application, will familiarize himself with the company and prepare it appropriately for the restructuring procedure, sensitize you to important nuances, indicate problematic risk zones, etc.
And what is most important and requires emphasizing once again – this professional restructuring support should be used as early as possible, at the first symptoms of a crisis – because then the most can be achieved and sometimes even insolvency can be prevented. The biggest pain and mistake of Polish entrepreneurs is the lack of trust in external restructuring advisors, and then the completely late submission of sometimes even erroneous applications for court protection of the initiated restructuring and arrangement with creditors.
In the case of Atlantica, let us remember that all may not be lost yet. In the course of bankruptcy, it is possible (if there are reasonable grounds) to change the option from liquidation to arrangement. Let us also remember that the trustee will first attempt to sell the company in its entirety - so the chances are that the company will find a new owner and only the company itself will be liquidated.
With the new year, entrepreneurs can expect numerous improvements in saving companies, which will be brought about by the New Restructuring Law, which, among other things, formally introduces the primacy of restructuring over bankruptcy liquidation.
on 22 April 2016
" Companies do not know that they will no longer be visited by the insolvency practitioner
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