In what situations do banks make it difficult to restructure companies?

The simplified restructuring procedure during the pandemic played a very important role in the context of saving Polish companies from bankruptcy. In practice, however, not all of its elements work properly. In the opinion of PMR Restructuring, the problem concerns, among others, financial institutions (banks), which have far too little time to properly analyse the situation of the debtor. As a consequence, this often leads to a distorted decision to vote on the arrangement.

The time allocated by the legislator for carrying out the simplified procedure restructuring of enterprises is 4 months and cannot be extended regardless of the circumstances.

As a result, banks receiving documentation to vote on the arrangement proposed by the entrepreneur often do not have time to properly and fairly analyse the situation of the company. Consequently, without comprehensive knowledge, they repeatedly vote against the arrangement, which triggers an avalanche of negative events. This worsens the situation not only of the indebted company, but also of the other creditors, including the banks themselves. It is then a vicious circle and a situation in which everyone is directly or indirectly affected. - explains Małgorzata Anisimowicz, President of the Management Board of PMR Restructuring and qualified restructuring advisor.

Practice shows that other contractors – such as public-law or commercial creditors – usually have no problem analysing the situation and making a rational decision regarding the information sent within the statutory deadline. arrangement proposals. However, it is worth remembering that it is the votes of banks, which are often the main creditors, that decide the outcome of the vote. Therefore, it is absolutely crucial to develop such a practice that, within the statutory deadline, and with sufficient advance notice, banks receive the necessary information enabling them to make a rational decision.

Fast communication with the bank at a premium

The question then arises whether anything can be done about it. According to PMR experts Restructuring solutions are available and fully feasible to implement.

Our practice as a restructuring advisor indicates that after opening the restructuring proceedings, each of the creditors should be immediately informed of this fact, at the same time providing the contact details of the court supervisor, who is the person to contact at this time. contact with creditors. Establishing a relationship with the bank is, however, a priority and in the case of simplified proceedings, this absolutely cannot be delayed - says Malgorzata Anisimowicz.

Already at this stage, the court supervisor provides the creditors with the information to be analysed before final proposals for an arrangement are drawn up. In the course of the proceedings, it is also advisable to develop a common document whereby the banks can obtain the individual necessary information from the supervisor/debtor for further analysis. In other words, in such a situation, it is worthwhile to meet the tight timetable and create the most comfortable conditions for financial institutions to carry out a proper, reliable analysis that can make a real difference in the voting process.

Fast, effective communication between banks and the court supervisor allows for full verification of the trader's situation by the major creditors. It also makes it possible to analyse whether a creditor will be satisfied to a greater extent under the simplified restructuring procedure than in the course of enforcement. underlines Malgorzata Anisimowicz and adds that efficient communication between the supervisor and the bank is a chance to develop the necessary standards aimed at protecting the legitimate rights of creditors. - In practice, it is also a simple way to increase the effectiveness of restructuring and save many Polish businesses that are fighting to avoid bankruptcy - he concludes.

Małgorzata Anisimowicz – qualified restructuring advisor and president of the management board PMR Restructuring provided commentary on a publication for the outsourcingportal.pl website devoted to outsourcing.

The article appeared on outsourcing portal, 30 August 2021. We invite you to read the full version:"In what situations do banks make it difficult to restructure companies?

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