Restructuring - a way for local government companies to get into trouble

The wave of insolvencies in the country is creeping up. In the first quarter of this year, 1,537 companies reported it, 31 per cent more than a year ago, according to Coface. The driving force, however, is not bankruptcies, but restructuring proceedings to prevent them.

In Q1 2024, as many as 1,537 decided to do so, 33 per cent more a year ago. Do tej pory były to głównie firmy prywatne. Na liście zaczyna jednak przybywać spółek publicznych, w tym samorządowych. Na mocy Postanowienia Sądu Rejonowego w Wałbrzychu, VI Wydział Gospodarczy z 29 czerwca 2020r. otwarto pierwsze w tym regionie postępowanie restrukturyzacyjne wobec Przedsiębiorstwa Komunikacji Samochodowej w Kłodzku S.A.. Po czterech latach restrukturyzacja zakończyła się sukcesem. W ubiegłym tygodniu sąd w Wałbrzychu zatwierdził układ przyjęty na zgromadzeniu wierzycieli. Zdaniem ekspertów to przełomowy wyrok, który może zachęcić kolejne spółki samorządowe do podejmowania działań restrukturyzacyjnych. Szczególnie, że wiele spółek samorządowych generuje straty a ich płynność jest słaba.

- There is still a lack of awareness and willingness to act on this. Our current reality is that local authority companies in trouble turn to the owner for funding without restructuring either operationally or in terms of liabilities. These are short-term solutions, a kind of 'drip' for the here and now. Unfortunately. Such measures do not solve problems. What is needed is a broad-spectrum action which will allow these entities to fulfil the tasks set before them and to lock in the costs. This really can be done," says Małgorzata Anisimowicz representing the administrator of PKS Kłodzko, i.e. the PMR Restrukturyzacje law firm, and adds that The immediate cause of the company's financial 'collapse' was the Covid-19 pandemic, which exacerbated the unfavourable situation of falling passenger numbers. Due to the temporary lockdown and strictures, the passenger transport industry according to CSO statistics in the period I-VIII 2020 recorded a 48.8% decrease in the number of passengers transported in intercity bus transport compared to the same period last year. The situation of PKS Kłodzko was very difficult, the company was at risk of insolvency, which endangered its ability to fulfil its public transport objectives.

In the course of the ongoing restructuring, a restructuring plan was developed the aim of which was to prepare the future strategy of the debtor's company, which would allow it to regain liquidity and increase the volume of its profits for the satisfaction of its creditors.

- In light of the opportunities that have arisen through the Act of 16 July 2020 on the provision of public aid in order to rescue or restructure the entrepreneur, the administrator applied for assistance in the form of temporary restructuring support in order to obtain financing to enable the entrepreneur to carry out business activities for the time necessary to implement restructuring measures aimed at restoring its long-term ability to compete in the market, and these funds were obtained. It was a good decision, and the funds obtained both supported the company in a difficult period and allowed it to implement operational changes in the enterprise," says Małgorzata Anisimowicz.

With regard to unsatisfied employee claims arising prior to the opening of proceedings, as well as liabilities for allowances, severance payments and compensation due to employees whose employment relationship ceased after the opening of proceedings, the administrator applied for payment of funds for this purpose from the Guaranteed Employee Benefits Fund. In the course of the restructuring, the employees received the funds due to them on this account

According to attorney Sylwia Hamryszak, representing the management board of PKS Kłodzko, the company's situation required the support of the company, on the one hand, due to the specific nature of the debtor itself, which remains a local government company whose aim and duty is to carry out tasks for the inhabitants of the region, and, on the other hand, due to the fact that in the course of restructuring, it is particularly the court administrator who is the body authorised to undertake important legal actions on behalf of the debtor for the company and its counterparties.

The Kłodzko Staroste, Małgorzata Jędrzejewska - Skrzypczyk, believes that the restructuring of PKS Kłodzko allowed the company to remain on the local regional transport market and to preserve its assets. Above all, as the owner, when deciding to restructure, we were concerned with preventing the exclusion of local residents, bringing about the stabilisation of passenger transport and the provision of school transport for children and young people.

The article appeared on @gazetaPrawna.pl:on 8 May 2024 and we invite you to read the full version:" Restructuring - a way for local government companies to get into trouble