Restructuring - more and more companies are opting for resolution procedures

In the first half of 2017, the number of Polish companies filing for bankruptcy or restructuring increased by as much as 18 per cent. The largest increase was recorded in restructuring proceedings, which allow the company to be repaired. According to experts, this trend will grow in the following years.

A report published by Coface shows that in the first half of this year, as many as 387 companies started bankruptcy or restructuring proceedings. This is 18 per cent more than in the first half of 2016. According to former Prime Minister Kazimierz Marcinkiewicz, the increase in bankruptcy and restructuring proceedings is due to the deterioration of legal and financial conditions in the business environment.

The largest number of bankruptcies for the purpose of liquidation of assets was declared - 238, but the number of companies that opted for this solution is lower than last year (249 companies). This is due to the amendment of the restructuring law, which came into force on 1 January 2016 and placed resolution proceedings (making an arrangement with creditors or carrying out sanitation measures) before the company bankruptcy.

It is therefore not surprising that the number of companies opting for a turnaround is increasing - 149 restructuring proceedings have already been announced this year, compared to only 57 in the same period of 2016.

According to the expert, the success of a restructuring depends very much on the stage the company in need of repair is at:

Former Prime Minister Kazimierz Marcinkiewicz points out that the report, while pointing to significant changes in bankruptcies and company restructurings in the first half of this year, does not explain their causes.

The material appeared on biznes.onet.pl:

1 August 2017:
" More and more companies are opting for resolution procedures