A Warsaw-registered trading company discovers that its Lithuanian subsidiary has stopped paying suppliers. Creditors in Vilnius are threatening enforcement. The parent board in Poland faces a hard question: which insolvency regime applies, where must proceedings be filed, and how long do they have before personal liability attaches?

Cross-border insolvency between Poland and Lithuania is governed primarily by EU Regulation 2015/848 on insolvency proceedings (the Recast EIR), which applies in both Member States. The Regulation determines jurisdiction by reference to the debtor's centre of main interests (COMI), which is presumed to be the registered office unless rebutted. Where COMI lies in Poland, main proceedings open before a Polish district court; where it lies in Lithuania, the Vilniaus apygardos teismas (Vilnius Regional Court) or another competent Lithuanian court takes jurisdiction. Secondary proceedings may then open in the other state, covering assets located there.

This alert sets out what has changed in practice, which businesses are directly affected, and the immediate steps boards must take – with hard deadlines attached.

What has changed in cross-border insolvency practice between Poland and Lithuania?

The Recast EIR has been in force since 2017, but enforcement patterns have shifted. Polish courts – operating through the National Court Register (Krajowy Rejestr Sądowy, KRS) – now communicate electronically with Lithuanian courts through the European e-Justice Portal. Insolvency practitioners appointed in one state are automatically recognised in the other without any separate exequatur procedure. That recognition is immediate and unconditional.

Lithuanian restructuring law underwent significant reform in 2022. The Įmonių restruktūrizavimo įstatymas (Enterprise Restructuring Act, ERA) was amended to align Lithuanian pre-pack procedures more closely with the EU Restructuring Directive (2019/1023). Polish practitioners now encounter Lithuanian moratoriums that carry automatic cross-border effect. A moratorium granted in Vilnius suspends individual enforcement actions against the debtor's Polish assets for up to four months, unless a Polish court lifts the stay on creditor application.

One practical consequence: a Polish supplier holding a judgment against a Lithuanian debtor may find that enforcement in Poland is automatically suspended the moment Lithuanian restructuring proceedings open. Missing that suspension notice – which arrives through the e-Justice Portal rather than by direct service – has cost creditors their enforcement window. The window to challenge a stay is 30 days from publication in the Lithuanian insolvency register.

Who is affected and what are the key thresholds?

Any Polish company with a Lithuanian subsidiary, branch, or significant asset base falls within scope. The Recast EIR applies regardless of company size. However, the practical risk profile differs by structure. Three categories carry the highest exposure.

  • Polish parent companies whose Lithuanian subsidiary holds more than EUR 500,000 in assets – secondary proceedings in Poland become economically viable for local creditors.
  • Lithuanian subsidiaries of Polish groups where the COMI has drifted to Lithuania through operational relocation – Polish boards may lose control of the insolvency process entirely.
  • Polish creditors with unsecured claims against Lithuanian debtors exceeding EUR 50,000 – the cost of participating in Lithuanian proceedings often exceeds recovery on smaller claims.

Board liability is the sharpest risk. Under Polish restructuring and insolvency law, directors must file for insolvency within 30 days of the company becoming insolvent. That 30-day clock runs regardless of whether parallel proceedings are open in Lithuania. A board that waits for Lithuanian proceedings to conclude before filing in Poland forfeits the statutory defence against personal liability. That forfeiture is irreversible.

We secured a reversal of a personal liability finding for a board member of a Mazowieckie-based logistics group whose Lithuanian subsidiary had entered insolvency proceedings (autumn 2024). The key issue was whether the Polish parent's own insolvency filing had been made within the statutory window. It had – by four days.

For a deeper analysis of how personal liability attaches to directors when tax arrears accumulate alongside insolvency, see our guide on board liability for tax arrears under the Tax Ordinance.

What immediate action is required?

Speed determines outcome. The following checklist covers the minimum steps boards and legal counsel should take within the first 14 days of identifying a cross-border insolvency risk.

  • Identify COMI: review where management decisions are actually made, not merely where the registered office sits. Courts look at operational reality over the preceding three months.
  • Check the Lithuanian insolvency register (Juridinių asmenų registro, JAR) for any published notices relating to the counterparty or subsidiary.
  • Assess the 30-day Polish filing deadline: if the Polish entity is itself insolvent, the clock is already running.
  • Instruct a Polish insolvency practitioner to evaluate whether a pre-pack sale of the Lithuanian subsidiary's Polish assets is viable before main proceedings open.
  • Notify the Polish Financial Supervision Authority (KNF) if the debtor operates in a regulated sector – delayed notification triggers separate regulatory liability.

Pre-pack procedures deserve particular attention. A pre-pack sale agreed before formal proceedings open can preserve going-concern value that a standard liquidation destroys. Polish courts have approved pre-pack sales of cross-border asset pools, including Lithuanian inventory and receivables, within 21 days of the opening of main proceedings. That speed requires preparation before filing – not after.

White-collar exposure is a secondary but real risk. If a board member transferred assets from the Lithuanian subsidiary to related parties in the 12 months before insolvency, both Polish and Lithuanian prosecutors may investigate. The Polish Penal Code provisions on fraudulent asset stripping apply to acts committed abroad where the debtor is Polish-registered.

Where data flows between the Polish parent and Lithuanian subsidiary are part of the insolvency estate, additional compliance obligations arise. Our analysis of data transfer from Poland to Lithuania covers the legal mechanisms that remain operative even during insolvency proceedings.

For a comparative view of how similar issues arise in another Baltic-adjacent jurisdiction, our alert on cross-border insolvency involving Poland and the Czech Republic provides a useful parallel framework.

Our team obtained interim measures protecting assets worth over EUR 3m for a Polish manufacturing group with operations in Lower Silesia and a Lithuanian distribution arm (spring 2025). Acting within 72 hours of the client's instruction, we secured a Polish court order freezing asset transfers pending COMI determination.

Specific situations require individual assessment. The interaction between Polish restructuring proceedings, Lithuanian moratoriums, and creditor enforcement timelines creates combinations that no general checklist fully resolves. To discuss how cross-border insolvency rules apply to your group structure, email info@kordeckipartners.com.

KORDECKI & Partners is a law firm based in Warsaw and Krakow, advising business clients across 30 jurisdictions. Our team combines expertise in Polish and international law with a practical approach to restructuring, cross-border insolvency, and white-collar defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams. To discuss your situation, contact info@kordeckipartners.com.

Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. KORDECKI & Partners assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@kordeckipartners.com.