Restructuring through an arrangement with creditors is gaining more and more supporters. It allows a company not only to get back on its feet, but also to continue operating successfully.
In the first three quarters of this year, a total of 325 restructuring proceedings were announced. This is 3.5 percent more than a year ago, and more than twice as many as in the first year of the new regulations, according to Coface data. As a result, restructurings already constitute 44 percent of all proceedings announced by courts restructuring and bankruptcy proceedings. The most significant, however, is the increase in accelerated arrangement proceedings. Their number increased by 15% in the last year to 229, making them 70% of all restructuring proceedings and 31% of all court decisions. Where does this popularity come from?
- Restructuring proceedings suspend the commenced enforcement proceedings and protect the company's assets. It therefore provides the possibility of further use of the assets in the company's operations, which may improve its financial situation. Thanks to the proceedings, the due date of receivables is suspended, and a payment memorandum is introduced. It is also attractive for the company due to its short duration - explains Marlena Grybowicz, expert PMR Restructuring.
The court is obliged to consider the application prepared and submitted by the debtor within a week of its receipt. In addition, it considers it in a closed session, i.e. without the participation of creditors, on the basis of documents attached to the application, i.e. proposals arrangement with a preliminary restructuring plan, a list of assets, a balance sheet, a list of creditors, a sum of receivables and a list of disputed receivables. Upon accepting the application, the court issues a decision, appoints a judge-commissioner and a court supervisor, who has a license as a restructuring advisor. This may be a natural person or a legal person. Then, within two weeks, the supervisor prepares a list of receivables, a list of disputed receivables and a restructuring plan. In the accelerated arrangement procedure, the creditors decide how they want to be satisfied by casting their vote on the submitted arrangement proposals. The procedure in this case is therefore significantly less formal. The date for voting on the arrangement should be set without undue delay. The debtor may enter into an arrangement with some or all of its contractors.
- After initiating the proceedings, the company is protected against enforcement by bailiffs, because it is no longer permissible to conduct individual enforcement of receivables covered by the arrangement, about which the court notifies the bailiffs. This fast procedure allows for the protection of the company's activity and the preservation of financial resources for current business activities - explains Małgorzata Anisimowicz, president PMR Restructuring Management Board
In short, such a procedure provides help to debtors who need immediate relief. judicial protection against enforcement actions carried out by creditors. There are more benefits. There is also a suspension of payments of receivables that arose before the day of opening the proceedings. Their payment will only occur after the creditors have voted on the arrangement proposals proposed by the debtor.
In addition, from the date of opening of the accelerated arrangement proceedings until the date of their closure or the date on which the decision to discontinue the accelerated arrangement proceedings becomes final, the termination by the lessor or lessor of the lease or tenancy agreement for the premises or real estate in which the debtor's enterprise is run, without the consent of the lessor or lessor, creditors' council, is inadmissible. The same applies to credit, leasing, property insurance, bank account, guarantee agreements, or those covering licenses granted to the debtor.
– It is worth adding that in the accelerated arrangement procedure, the debtor can retain management of the company, which means that he does not lose control over it, but in fact receives the support of a restructuring advisor who supports him and guides him through restructuring process companies - adds Małgorzata Anisimowicz.
Finally, as he points out, initiating the proceedings protects the board members from personal liability for unmet obligations. It gives the board the opportunity to introduce deep restructuring changes, without exposing yourself to personal risks and financial liability in the event of failure.
However, experts point out that accelerated arrangement proceedings are not for everyone. - They are aimed at entrepreneurs who are in the initial phase of the crisis, i.e. those who are not yet subject to numerous bailiff enforcement proceedings, but the amount of unperformed liabilities is already significant. Thus, the initiation of further bailiff executions may threaten the loss of liquidity, explains Małgorzata Anisimowicz. She adds that the proceedings may be conducted on the condition that the sum of disputed receivables does not exceed 15 per cent of the sum of receivables entitling to vote on the arrangement.
Entrepreneurs planning an accelerated arrangement procedure should still bear in mind a few rules. Without their fulfilment, such proceedings may not be opened by the court. Firstly, the documentation attached to the application for the opening of proceedings must present rational arguments, e.g. ensuring that there will be no harm to creditors and indicating the company's restructuring capacity.
- It is also necessary to ensure that the restructuring measures taken can be implemented in a short period of time, which allows the company's situation to be stabilised and its financial situation to be improved, making it possible, above all, to implement the arrangement, explains Marlena Grybowicz.
Finally, it is important to remember about the costs. The debtor pays an advance for the expenses of the accelerated arrangement proceedings in the amount of the average monthly remuneration in the enterprise sector without payments of rewards from profit in the third quarter of the previous year, announced by the President of the Central Statistical Office. On top of that, there is the remuneration of the court supervisor, which depends, inter alia, on the number of creditors who are participants in the proceedings and the amount of their receivables, but also on the scope of activities undertaken by the court supervisor or the length of the proceedings.
on 3 December 2019
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