A Polish manufacturing group with subsidiaries in Warsaw and Kraków discovers that both entities are insolvent. The parent board must decide, within days, whether to file jointly, separately, or through a single centre of main interests. Each choice carries a different procedural path, a different cost, and a different exposure for directors personally.
Cross-border insolvency involving two Polish entities is governed primarily by the Prawo restrukturyzacyjne (Restructuring Law) and the Prawo upadłościowe (Insolvency Law), both of which came into force in 2016 and have since been amended to align with EU Regulation 2015/848 on insolvency proceedings. Where both debtors are domiciled in Poland, the proceedings are formally domestic, yet the cross-border dimension arises whenever assets, creditors, or contractual relationships span multiple jurisdictions. The National Court Register (Krajowy Rejestr Sądowy, KRS) and the district courts competent for insolvency matters are the primary institutional actors. Boards that miss the 30-day filing deadline risk personal liability for the full amount of unsatisfied creditor claims.
This analysis examines the doctrinal framework, procedural architecture, and strategic choices available when two Polish-registered entities face simultaneous insolvency. It covers the centre of main interests (COMI) doctrine, coordination mechanisms, pre-pack arrangements, and the white-collar defence dimension that arises when boards are exposed. The analysis closes with a forward-looking outlook on legislative and judicial trends.
What is the legal framework for insolvency proceedings in Poland?
Polish insolvency law offers two parallel tracks: liquidation proceedings under the Insolvency Law and restructuring proceedings under the Restructuring Law. The restructuring track itself splits into four procedures – accelerated arrangement, arrangement, sanation, and remedial proceedings – each calibrated to a different severity of financial distress. The choice between tracks is not merely strategic; it determines the scope of the automatic stay, the role of the court supervisor, and the treatment of secured creditors. Boards that select the wrong track forfeit procedural protections that cannot be recovered later.
The Restructuring Law introduced the concept of the arrangement supervisor (nadzorca układu), who can be appointed without a court order. This allows a debtor to open restructuring while continuing to trade. The court is notified within three days of appointment. Failure to notify within that window renders the protection void. For a group with two Polish entities, each entity must appoint its own supervisor unless the court consolidates proceedings – a discretion the court exercises cautiously.
The Sąd Rejonowy (District Court) for the debtor's registered office holds jurisdiction. Where two entities share a registered office city – Warsaw or Kraków – a single court division may handle both cases. This administrative proximity does not, however, create automatic consolidation. Creditors dealing with the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) as a regulated-entity creditor face additional notification requirements that can delay the opening of proceedings by up to 14 days.
- Liquidation: assets realised, entity dissolved
- Accelerated arrangement: pre-agreed restructuring plan, court approval within two months
- Arrangement proceedings: more complex creditor voting, up to 12 months
- Sanation: broadest restructuring powers, including employment contract termination
One concrete figure matters here: a debtor is presumed insolvent when its liabilities exceed its assets for 24 consecutive months. That threshold triggers the board's obligation to file. Missing it by even one day opens the door to personal liability claims – a point we return to in the board liability section below.
How does the COMI doctrine affect proceedings involving two Polish entities?
The centre of main interests doctrine, imported from EU Regulation 2015/848, determines which court has international jurisdiction over a debtor. For two Polish entities, COMI is presumed to lie at the registered office – unless the debtor can rebut that presumption with evidence of actual management being exercised elsewhere. Where both entities are genuinely managed from Warsaw, COMI analysis is straightforward. Complexity arises when one entity's operational headquarters differs from its registered address, or when a foreign parent exercises de facto control.
We secured a favourable COMI determination for a logistics group restructuring across two Polish entities in the Mazowieckie region (spring 2025). The group had its registered offices in separate districts, but the court accepted that central treasury management was conducted from a single Warsaw address. This reduced the number of competent courts from two to one – cutting procedural costs by an estimated 30%.
Where COMI is established in Poland, Polish courts open main proceedings. Secondary proceedings can be opened in any EU member state where the debtor has an establishment. For a group with purely Polish entities, secondary proceedings abroad remain theoretically possible if either entity holds a branch or place of business in another EU state. The practical risk is a foreign creditor – German, Czech, or Austrian – opening secondary proceedings to ring-fence local assets before the Polish administrator can act. Boards should audit cross-border asset exposure before filing.
The KRS registration record is the starting point for any COMI analysis. Courts in Poland treat the registered office as a strong presumption. Rebutting it requires contemporaneous evidence: board minutes, bank mandates, and lease agreements all showing a different operational centre. Assembling that evidence after insolvency is filed is significantly harder than preparing it in advance.
For a practical comparison of how COMI operates when one entity is Polish and the other is Italian, see our analysis of cross-border insolvency involving Poland and Italy, which addresses secondary proceedings in greater depth.
What are the coordination and consolidation options for two Polish debtors?
Polish law does not yet provide a statutory group insolvency mechanism equivalent to the one proposed in the EU Directive on preventive restructuring frameworks. Coordination between two separate Polish insolvency proceedings therefore relies on judicial discretion, contractual mechanisms between administrators, and practical arrangements approved by the creditors' committee. The absence of a statutory tool is itself a risk: coordination can break down when creditor interests diverge between the two estates.
The most common coordination tool in practice is the appointment of the same court administrator (syndyk) or arrangement supervisor for both entities. Courts in Warsaw and Kraków have granted such appointments where the group's creditor base overlaps substantially. A single administrator can negotiate a single arrangement plan covering both entities, present it to a joint creditors' meeting, and avoid the duplication of professional fees – which in a mid-size insolvency can exceed PLN 500,000 per proceeding.
The pre-pack sale (przygotowana likwidacja) offers a further coordination mechanism. Under Polish insolvency law, a buyer can be identified before the filing, the sale approved by the court at the opening hearing, and the business transferred within weeks of filing. For a group with two Polish entities, a pre-pack can cover both estates in a single transaction. The buyer assumes the operating business; the remaining shell entities proceed to liquidation. This structure protects employment and preserves going-concern value – both outcomes that affect the ESG due diligence process that acquirers now conduct routinely. Our article on ESG due diligence in supply chains examines how insolvency-related supply chain disruptions affect compliance assessments.
- Appoint a single administrator across both estates where creditor overlap is high
- Draft a joint arrangement plan with unified voting thresholds
- Use pre-pack to preserve going-concern value before filing
- Establish a coordination protocol between administrators if separate appointments are unavoidable
Creditors holding security over assets in both estates face a particular coordination challenge. A secured creditor can, in principle, enforce outside insolvency if the automatic stay does not apply to its specific instrument. Sanation proceedings provide the broadest stay – covering even secured creditors for up to 12 months. Choosing sanation for both entities simultaneously is therefore the strongest tool available to management seeking breathing room for a restructuring negotiation.
For a tailored strategy on coordinating two Polish insolvency proceedings, reach out to info@kordeckipartners.com.
When does board liability arise in a Polish group insolvency?
Board liability in a Polish group insolvency has two distinct legal bases. The first is the 30-day filing obligation under insolvency law: if the board fails to file within 30 days of the onset of insolvency, each board member becomes personally liable for the full amount of creditor claims that remain unsatisfied from the estate. This liability is joint and several. It is also irreversible – a board member who missed the deadline cannot cure the exposure by filing late. The only defence is proving the delay caused no damage, which Polish courts interpret narrowly.
The second basis is corporate liability under the Kodeks spółek handlowych (Commercial Companies Code, KSH). Board members who, in the period preceding insolvency, entered into transactions that reduced the estate – asset transfers at undervalue, preferential payments to related parties, or dividend distributions when the company was already balance-sheet insolvent – face claims from the administrator for recovery of those amounts. The look-back period for such claims is up to five years. For a group with two Polish entities, transactions between the entities during that period are scrutinised with particular intensity.
We obtained a dismissal of personal liability claims against a board member of a Małopolska-based retail group (winter 2024). The administrator had alleged that an inter-company loan made 18 months before filing constituted a preferential transaction. We demonstrated that the loan was made on arm's-length terms and was part of a documented treasury management policy. The court accepted that the board had acted with due diligence.
The white-collar defence dimension should not be underestimated. Where insolvency is preceded by financial fraud, the Public Prosecutor's Office (Prokuratura) may open parallel criminal proceedings for action to the detriment of creditors. Board members facing both civil liability claims from the administrator and criminal investigation by the prosecutor are in a position that demands separate legal representation for each proceeding. Mixing insolvency counsel with criminal defence counsel creates conflicts that precludes effective protection in either forum.
For a detailed analysis of personal exposure under KSH, see our guide on board liability and personal exposure.
The specific challenge in a two-entity group is that the filing obligation runs independently for each entity. A board member who serves on both boards must monitor solvency at both levels simultaneously. If entity A becomes insolvent in January and entity B becomes insolvent in March, two separate 30-day clocks are running. Missing either deadline triggers separate liability. Practical tip: establish a monthly solvency test protocol at group level, documented in board minutes, from the moment any entity enters financial difficulty.
What is the strategic outlook for restructuring Poland's multi-entity groups?
The legislative direction is clear. Poland is in the process of implementing the EU Directive on preventive restructuring frameworks, which will introduce a statutory group coordination mechanism for the first time. Once implemented – expected by mid-2026 – a group coordinator will be able to propose a group restructuring plan covering multiple Polish entities simultaneously. This will replace the current reliance on judicial discretion and administrator coordination protocols. The new mechanism will reduce costs and increase predictability for groups with complex inter-company structures.
Until implementation, the most effective strategy for a multi-entity group in distress is early engagement. Boards that commission a restructuring review at least six months before insolvency becomes probable retain the full menu of options: sanation, pre-pack, accelerated arrangement, or a private restructuring without court involvement. Boards that wait until the 30-day clock is running have, in practice, only one realistic option – filing for liquidation and hoping the administrator recovers sufficient assets to satisfy creditors. That outcome forfeits going-concern value and exposes directors personally.
The interaction between insolvency proceedings and ongoing commercial contracts also deserves attention. Polish insolvency law allows the administrator to disclaim onerous contracts within three months of the opening of proceedings. For a group with long-term supply agreements, this power can be used strategically to shed unprofitable commitments. However, disclaimer triggers a damages claim from the counterparty, which ranks as an insolvency creditor. The net benefit depends on the size of the remaining contract term and the counterparty's likely recovery rate.
- Commission a solvency review at least six months before distress becomes acute
- Document board decisions on inter-company transactions with formal minutes
- Appoint restructuring counsel before appointing insolvency counsel – the options narrow quickly
- Audit cross-border asset and creditor exposure before filing
- Prepare COMI evidence contemporaneously, not retrospectively
The coming years will also see greater judicial scrutiny of pre-pack transactions. Polish courts are developing case law on the adequacy of pre-pack valuations and the fairness of buyer selection processes. Groups that conduct a transparent pre-pack – with an independent valuation, a market-testing period, and a documented selection process – are better placed to withstand creditor challenges. Those that use pre-pack as a vehicle for management buyouts at distressed prices face increasing risk of judicial reversal and administrator clawback claims.
Specific circumstances require specific advice. If your group is facing simultaneous insolvency across two Polish entities, the choice of procedure, the timing of filing, and the structure of any pre-pack transaction will determine outcomes for creditors, employees, and directors alike. To receive an expert assessment of your group's restructuring options, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can two Polish entities file for insolvency jointly in a single proceeding?
A: Polish law does not currently provide a formal joint filing mechanism for group entities. Each entity must file separately with the district court for its registered office. However, courts have discretion to appoint the same administrator for both proceedings and to coordinate creditors' meetings. This practical coordination falls short of a statutory consolidation, but it significantly reduces duplication of costs and professional fees. The EU Directive implementation, expected by mid-2026, will introduce a formal group coordination mechanism.
Q: How long does a Polish sanation proceeding typically take, and what does it cost?
A: Sanation proceedings typically last between 12 and 24 months from the opening order to the final approval of the arrangement. Court fees at filing are relatively modest – currently PLN 1,000 for the opening application. The dominant cost is the restructuring advisor and administrator's remuneration, which is calculated as a percentage of the estate's value and typically ranges from PLN 200,000 to over PLN 1,000,000 for a mid-size business. A common misconception is that sanation is reserved for large corporations. In practice, it is available to any debtor whose restructuring is feasible and whose assets exceed liabilities on a going-concern basis.
Q: Does personal board liability under Polish insolvency law apply to foreign directors of a Polish subsidiary?
A: Yes. Polish insolvency law applies to all members of the management board of a Polish-registered entity, regardless of their nationality or country of residence. A German or Ukrainian director of a Polish subsidiary is subject to the same 30-day filing obligation and the same personal liability consequences as a Polish national. The obligation runs from the moment the entity becomes insolvent – defined as either cessation of payment of due debts or excess of liabilities over assets for 24 consecutive months. Foreign directors who are unaware of this rule are not protected by that unawareness.
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, insolvency, and white-collar defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams navigating complex multi-entity distress situations. 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.