A Kyiv-based technology company holds its intellectual property in a Polish subsidiary registered with the National Court Register (KRS). The Ukrainian parent enters financial distress in late 2025. Within weeks, Polish creditors are knocking on the subsidiary's door – and the board in Warsaw faces personal exposure it may not have anticipated. The question is not whether Polish insolvency law applies. It is how quickly the board must act, and what the Ukrainian dimension changes.
Cross-border insolvency involving Poland and Ukraine requires simultaneous engagement with two distinct legal regimes: Polish restructuring and insolvency law, governed by the Prawo restrukturyzacyjne (Restructuring Law, PRL) and the Prawo upadłościowe (Insolvency Law, PUL), and Ukrainian insolvency proceedings under the Kodeks z bankrutstva (Code on Bankruptcy Proceedings). Poland applies a modified version of the UNCITRAL Model Law framework through its EU membership obligations, while Ukraine operates outside the EU insolvency regulation regime entirely. Boards of Polish entities linked to Ukrainian parents have 30 days from the moment of insolvency to file with the competent district court – failing this deadline triggers personal liability of directors for the full amount of unsatisfied creditor claims.
This guide walks through the step-by-step procedure, realistic timelines, cost estimates, three business scenarios, and the most common mistakes made by boards caught between Warsaw and Kyiv. Each section addresses the practical consequences that follow from inaction or missteps in either jurisdiction.
How does Polish insolvency law apply to Ukrainian-linked entities?
Polish insolvency law draws a clear boundary: it applies to any legal entity with its registered office or principal assets in Poland, regardless of the nationality of its shareholders. A Polish spółka z ograniczoną odpowiedzialnością (private limited liability company, sp. z o.o.) owned by a Ukrainian parent is fully subject to PUL from day one. The Polish Financial Supervision Authority (KNF) and the National Court Register (KRS) treat it no differently from a domestically owned entity.
The critical threshold is the 30-day filing deadline. Polish insolvency law defines insolvency as either balance-sheet insolvency (liabilities exceeding assets for more than 24 months) or cash-flow insolvency (inability to meet monetary obligations as they fall due for more than three months). Once either condition is met, the 30-day clock starts. Missing it does not merely expose the company to penalties. It forfeits the board's ability to limit personal liability and precludes access to the pre-pack sale procedure, which can protect operational value.
Ukrainian-linked structures add a layer of complexity. When the Ukrainian parent itself is subject to bankruptcy proceedings before Ukrainian courts, Polish creditors face a coordination problem. Ukrainian insolvency proceedings do not benefit from automatic recognition in Poland under EU Regulation 2015/848 – that regulation applies only to EU member states. Recognition in Poland requires a separate application to the competent Polish district court, typically taking 60 to 90 days. During that window, Polish creditors may pursue enforcement actions against Polish assets independently.
- Confirm the registered seat and CEIDG/KRS status of the Polish entity immediately.
- Identify which insolvency trigger – cash-flow or balance-sheet – has been met first.
- Assess whether the Ukrainian parent's proceedings have been formally opened.
- Map all Polish assets that may be subject to enforcement by local creditors.
- Determine board composition and personal liability exposure under Polish corporate legislation.
We obtained interim protective measures over Polish real estate assets worth over PLN 8m for a Ukrainian investor's subsidiary in Małopolska (winter 2025). Acting within the first two weeks of distress was the factor that preserved the asset base for restructuring.
What is the step-by-step procedure for cross-border insolvency restructuring?
The restructuring pathway is distinct from outright insolvency filing. Under the Restructuring Law, four procedures are available in Poland: arrangement approval proceedings (postępowanie o zatwierdzenie układu), accelerated arrangement proceedings, arrangement proceedings, and remedial proceedings. For Ukrainian-linked entities under acute cross-border pressure, accelerated arrangement proceedings – with a statutory court timeline of two to three months – are the most frequently used instrument. Filing fees start at PLN 1,000 and creditor claims must be listed within 30 days of court appointment of a supervisor.
Step one is the internal assessment. The board must obtain a current balance sheet, a creditor list, and a cash-flow projection covering at least 12 months. This typically takes five to ten business days. Step two is the appointment of a licensed restructuring adviser (doradca restrukturyzacyjny) licensed by the Ministry of Justice. Their role is mandatory in three of the four procedures. Adviser fees range from PLN 15,000 to PLN 80,000 depending on the size of the estate.
Step three is the court filing itself. The application goes to the district court (sąd rejonowy) at the company's registered office – in Warsaw, this means the District Court for the Capital City of Warsaw. The court issues a decision within one to two weeks. Step four is creditor communication: the supervisor notifies all known creditors, including any Ukrainian parent or affiliated entities, of the stay on enforcement. This stay is critical – it halts Polish enforcement proceedings for the duration of the restructuring.
Step five is the arrangement vote. Creditors vote within the statutory period, which varies by procedure but is typically 60 to 120 days from the opening decision. A successful vote requires approval by a majority of creditors holding at least two-thirds of the total claims. Step six is court approval of the arrangement and commencement of the execution phase, which can run from 12 months to five years depending on the terms agreed.
For the Ukrainian dimension, a parallel step is essential: engaging Ukrainian counsel to monitor the parent's proceedings and ensuring that any asset transfers between the Ukrainian parent and the Polish subsidiary are documented and defensible. Transfers made within 12 months of the insolvency filing date are subject to challenge under Polish insolvency law's avoidance provisions.
Which business scenarios create the highest personal liability risk for boards?
Board liability under Polish corporate legislation is the sharpest risk in cross-border insolvency cases. Under the Kodeks spółek handlowych (Commercial Companies Code, KSH), board members of a Polish sp. z o.o. face personal liability for the company's unsatisfied obligations if they fail to file for insolvency within the statutory 30-day window. This liability is joint and several, unlimited in amount, and extends to former board members who held office when the insolvency condition arose. For detailed analysis, see our dedicated guide on board liability under Polish corporate law and personal exposure.
Three scenarios illustrate where the risk concentrates most sharply.
Manufacturing scenario. A Silesian manufacturer is a wholly owned subsidiary of a Ukrainian industrial group. The parent stops transferring operating funds in Q3 2025. The Polish board continues trading, relying on supplier credit, for four months before filing. The four-month delay means the board members are personally liable for obligations incurred after the insolvency condition arose – potentially PLN 3m to PLN 10m in supplier and tax claims. White-collar defence considerations also arise if creditors allege fraudulent trading.
IT scenario. A Warsaw-based software company holds IP licences from a Ukrainian parent. The parent enters Ukrainian bankruptcy proceedings. The Polish entity's revenue collapses because the licence agreements are suspended. The board argues the company is not yet insolvent. However, balance-sheet insolvency may already exist if the IP licences are the primary asset and their value must be written down. Failure to recognise this triggers the 30-day clock retroactively.
Foreign investor scenario. A German investor holds a minority stake in a Polish joint venture alongside a Ukrainian majority shareholder. The Ukrainian shareholder's insolvency creates deadlock at board level. Under Polish corporate legislation, a deadlocked board does not suspend the insolvency filing obligation. Each board member bears individual liability. The German minority investor's nominee director is equally exposed – regardless of instructions received from the German principal.
We secured a reversal of personal liability claims exceeding PLN 4m for a board member of a Mazowieckie-region logistics company whose Ukrainian parent had entered insolvency proceedings without notifying Polish management (spring 2025). The defence turned on precise documentation of when the Polish entity's insolvency condition was first identifiable.
What are the most common mistakes in Poland-Ukraine cross-border insolvency cases?
Mistake one: treating Ukrainian proceedings as automatically binding in Poland. They are not. Ukrainian court decisions have no automatic effect on Polish assets or creditors. Creditors in Poland can and do pursue enforcement independently while Ukrainian proceedings are pending. The absence of a bilateral treaty on mutual recognition of insolvency judgments between Poland and Ukraine means each jurisdiction acts autonomously until a Polish court issues a specific recognition order.
Mistake two: delaying the Polish filing while waiting for clarity on the Ukrainian side. The 30-day deadline does not pause because the parent is in distress. Boards that wait for the Ukrainian proceedings to stabilise before acting in Poland routinely miss the filing window. Personal liability crystallises regardless of the cross-border context.
Mistake three: failing to use the pre-pack procedure where available. A pre-pack sale (przygotowana likwidacja) allows the sale of the business as a going concern before insolvency is formally declared, subject to court approval. The buyer is identified in advance and the sale closes within 30 days of the insolvency filing. This preserves employment, contracts, and operational value in a way that standard liquidation does not. Pre-pack is particularly effective where the Polish entity has genuine operational value independent of the distressed Ukrainian parent.
Mistake four: ignoring posted workers and employment obligations. Polish employment law imposes separate obligations on employers in insolvency, including priority payment of wages up to a statutory cap administered by the Employee Guarantee Fund (Fundusz Gwarantowanych Świadczeń Pracowniczych, FGŚP). Ukrainian nationals employed in Poland under posted-worker arrangements have specific documentation requirements – see our analysis of posted workers from Ukraine to Poland and A1 certificate obligations.
Mistake five: underestimating the avoidance risk on intercompany transactions. Payments made to the Ukrainian parent within 12 months of the Polish insolvency filing are presumptively voidable. This includes management fees, licence payments, and intercompany loans repaid during that period. The Polish insolvency administrator has standing to recover these amounts.
What checklist should boards use before filing in Poland?
Preparation quality directly affects both the outcome of the restructuring and the board's ability to rebut personal liability claims. Courts and administrators assess whether the board acted diligently from the moment the insolvency condition arose. A well-prepared filing takes five to fifteen business days; a poorly prepared one can result in the court rejecting the application and the 30-day window closing without protection. For a full overview of available restructuring instruments under Polish law, see our restructuring practice page for Poland.
The following items should be assembled before any filing:
- Current balance sheet and profit-and-loss statement, no older than 30 days.
- Complete creditor list with amounts, maturity dates, and security interests.
- 12-month cash-flow projection prepared or reviewed by a financial adviser.
- Documentation of when the insolvency condition first arose – this is the key date for liability purposes.
- Evidence of the Ukrainian parent's status: court filings, administrator appointments, or official communications.
Two additional items are specific to cross-border cases. First, a legal opinion from Ukrainian counsel confirming the parent's procedural status and any asset freeze orders in Ukraine. Second, a mapping of all intercompany transactions in the preceding 24 months, with supporting documentation. Both items materially reduce the risk of avoidance claims and facilitate the Polish court's assessment of the cross-border dimension.
The cost of a well-structured Polish restructuring filing, including adviser fees, court costs, and legal representation, typically falls between PLN 50,000 and PLN 200,000 for mid-sized entities. This compares favourably to the cost of personal liability exposure, which can reach several million PLN in contested cases.
Specific situations involving Ukrainian parent insolvency require precise, time-sensitive action. Delay of even a few weeks can close off restructuring options irreversibly and shift full personal liability to board members. To receive an expert assessment of your company's exposure and available options, contact info@kordeckipartners.com.
Frequently asked questions
Q: Does the 30-day filing deadline apply even if the Polish entity is technically solvent on a standalone basis?
A: Yes, if the balance-sheet insolvency condition is met at the Polish entity level – for example, because intercompany receivables from the Ukrainian parent must be written down – the 30-day clock runs regardless of the parent's status. The board cannot rely on the parent's position as a defence. Boards should obtain an independent valuation of intercompany assets as soon as the parent enters distress. Waiting for the Ukrainian proceedings to conclude before assessing the Polish entity's position is the most common and most costly mistake.
Q: How long does recognition of Ukrainian insolvency proceedings take in a Polish court?
A: Recognition requires a separate court application and typically takes 60 to 90 days from filing. During this period, Polish creditors retain full enforcement rights against Polish assets. There is no automatic stay. Parties seeking to protect Polish assets during the recognition process should apply for interim measures simultaneously with the recognition application. Interim measures can be granted within days and provide a temporary freeze on enforcement pending the full recognition decision.
Q: Is a pre-pack sale available to a Polish entity whose Ukrainian parent is already in insolvency?
A: Yes. The pre-pack procedure under Polish insolvency law is available to any Polish entity that meets the insolvency filing threshold, regardless of the shareholder's status. The buyer is identified before filing, the sale price is set at market value confirmed by a court-appointed expert, and the transaction closes within approximately 30 days of the insolvency declaration. A pre-pack is particularly effective in Ukrainian-linked cases because it separates the Polish operating business from the distressed parent structure quickly and with court-supervised legitimacy, protecting the buyer from avoidance claims.
About KORDECKI & Partners
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 cross-border restructuring and insolvency. We work with Polish entrepreneurs, foreign investors, and in-house legal teams navigating distress situations involving Ukrainian, CIS, and EU-connected entities. 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.