Restructuring

The sooner you decide to take action, the better your chances of avoiding the crisis

There can be many reasons for a crisis. For a company’s management it is a difficult task to interpret the first warning signs correctly. Staying competitive requires the appropriate countermeasures.

In that situation, the decisive step is to consult a turnaround specialist at an early stage in order to take the appropriate corrective actions.

In the scope of restructuring services we offer consultation including company law, labour law, due diligence analysis, support during M&A processes and essential control of conducted measures. We offer restructuring consultancy in aspect of repairment and development. We plan, prepare and implement restructuring processes that are optimal for our clients. In other words, we help companies to overcome crises.

We use the resources of the European network of law firms.

By virtue of the Restructuring Law, it created an institutional platform for assisting the exit of bankrupcy for insolvent entrepreneurs and it gave creditors an alternative to recovering receivables to a higher standard than in court execution or insolvency proceedings.

We are also prepare own less formal restructuring projects.
As part of this restructuring act the law provides five restructuring procedures:

Thr arrangement approval proceedings

The least formal restructuring procedure. Procedure applicable to entrepreneurs who meet statutory preconditions of insolvency, but who are aware that in the nearest future they will face financial problems. The procedure can be performed in situations when the value of disputable receivables does not exceed 15% of the total amount of liabilities. The debtor itself gathers votes of its creditors in order to make arrangement with them. A new entity is introduced to the proceedings – a restructuring adviser. The entity is selected by the debtor
The restructuring adviser plays the role of an arrangement supervisor, and he/she does not limit the debtor’s capacity to manage the enterprise. An arrangement is made once the debtor has been backed by a majority of creditors entitled to participate in voting over the arrangement, having in total at least 2/3 of total receivables. After finishing collecting votes “in favour”, the debtor files a petition to a court for approving the arrangement. A court approves of arrangements only on the basis of received documents.A court shall examine petitions within 2 weeks.

The accelerated arrangement proceedings

Debtors are capable of making arrangements after drawing up, and having approved a list of receivables in a simplified form. The proceedings may be performed if the value of disputable receivables does not exceed 15% of the total value of receivables . Restructuring plan is drawn up by an independent entity appointed by a Court – an Insolvency Administrator. After initiating accelerated bankruptcy proceedings, enforcement proceedings are suspended, and bank account attachments may be revoked by a Magistrate in Bankruptcy. A Court examines petitions at in camera hearings on the basis of documents attached to petitions within 1 week. A Magistrate in Bankruptcy and an Insolvency Administrator are appointed Accelerated arrangement proceedings are to last 2-3 months
A debtor maintains the right to manage a company-a court may appoint an administrator and deprive a debtor of its right to manage a company. Within 2 weeks, an Insolvency Administrator is obliged to draw up a list of receivables, a list of disputable receivables, and a restructuhhring plan. An arrangement is made at a meeting of creditors convened by a Court.

The arrangement proceedings

Intended for entities at the brink of insolvency or insolvent entities and for entrepreneurs whose value of disputable receivables exceeds 15% of total value of receivables entitling to vote. A debtor still manages its assets – under supervision of an Insolvency Administrator . A debtor has to prove its ability to cover current costs of arrangement proceedings and satisfy liabilities arising after making the arrangement. A court may request a debtor to pay a deposit for expenses connected with carrying out proceedings aimed at initiating arrangement proceedings. Within one month from the date a court decides to initiate arrangement proceedings, an insolvency administrator prepare a list of receivables and a restructuring plan.
Voting for the arrangement is performed according to general conditions.

The recovery proceedings

Intended for insolvent entrepreneurs who are worth rescuing (greater satisfaction of claims than in case of a bankruptcy). A debtor has to prove that he will be able to cover costs of proceedings and current expenses arising after initiating recovery proceedings.
A court deprives a debtor right to manage an enterprise and appoints an administrator. Only in special cases courts allow to take basic actions – ordinary management.
Once recovery proceedings have been initiated, assets of a debtor constitute recovery estate.

The partial arrangement

It may be adopted and approved only in proceedings aimed at approving arrangement or in accelerated arrangement proceedings.
It includes creditors identified on the basis of unambiguous and economically justified indications.
Only creditors included in the arrangement vote for it.
Division of creditors and approval of the arrangement may be appealed against by all creditors.