A manufacturing company in the Silesia region misses two consecutive loan repayments. The management board knows the business is viable – orders are coming in, the workforce is experienced, and the underlying product is sound. What kills companies in this position is not the trading problem. It is the failure to act before the window closes.

Debtor-in-possession (DIP) restructuring under Polish law allows a company to reorganise its debts while retaining operational control, without transferring management to an external administrator. The procedure is governed by the Prawo restrukturyzacyjne (Restructuring Law, PrRest), which entered into force in 2016 and created four distinct restructuring tracks. The debtor must open proceedings before insolvency becomes irreversible – Polish law sets a 30-day deadline for filing once insolvency conditions are met, and missing that window triggers personal liability of board members for the company's unsatisfied obligations.

This guide walks through the DIP procedure step by step: which track fits which situation, how long each phase takes, what it costs, and where companies typically go wrong. Three business scenarios illustrate the framework in practice. A checklist and FAQ close the guide for quick reference.

What does debtor-in-possession restructuring mean under Polish law?

Polish restructuring law offers four procedures. Three of them are DIP procedures – meaning the debtor keeps management control throughout. The fourth, remedial proceedings (postępowanie sanacyjne), involves an administrator and is not DIP in the strict sense. The three DIP tracks are: approval proceedings (postępowanie o zatwierdzenie układu), accelerated arrangement proceedings (przyspieszone postępowanie układowe), and standard arrangement proceedings (postępowanie układowe).

The National Court Register (KRS) and the National Restructuring Register (Krajowy Rejestr Zadłużonych, KRZ) record all restructuring openings. Any creditor or counterparty can search the KRZ within minutes. That visibility matters for negotiating strategy. The Polish Financial Supervision Authority (KNF) monitors regulated entities separately, which adds a layer of compliance for banks and insurers considering restructuring.

The central DIP benefit is the automatic moratorium. Once proceedings open, enforcement actions are suspended. Creditors cannot seize assets, terminate key contracts unilaterally, or accelerate secured loans – at least for the duration of the moratorium period, which varies by track between one and four months initially. That breathing space is the reason DIP restructuring preserves going-concern value that liquidation would destroy.

Board liability is a constant backdrop. Under Polish corporate legislation, directors who fail to file for insolvency within 30 days of insolvency conditions arising face personal liability for the full amount of unsatisfied creditor claims. Opening a restructuring proceeding within that window is one of the recognised ways to interrupt that clock – but only if the filing is genuine and the business is actually restructurable.

Which restructuring track fits your situation?

Track selection is the single most consequential decision in a Polish restructuring. The wrong track wastes months, increases costs, and may allow creditors to convert the proceeding to insolvency. The three DIP tracks differ on one key variable: the proportion of disputed claims in the creditor pool. If disputed claims exceed 15% of total liabilities, the approval track is unavailable. Standard arrangement proceedings handle disputed claims above 15% but involve greater court oversight.

The approval track is the fastest and most flexible. There is no court-supervised opening phase. The debtor appoints a licensed restructuring adviser (doradca restrukturyzacyjny) directly, negotiates with creditors privately, and only approaches the District Court (Sąd Rejonowy) at the end to approve the agreed arrangement. The entire process can close in three to four months. Court fees are low – the filing fee for approval is PLN 1,000. This track suits companies with a concentrated creditor base willing to negotiate informally.

Accelerated arrangement proceedings take four to five months and involve a court-appointed supervisor (nadzorca sądowy). The debtor retains full management but cannot dispose of assets above a threshold set by the court – typically PLN 100,000 – without supervisor consent. This track suits mid-size companies with 20 to 100 creditors and no heavily contested claims.

Standard arrangement proceedings apply where the creditor pool is large or claims are disputed. They run six to twelve months. The court appoints a supervisor with broader powers. This track is appropriate for companies with complex capital structures or significant trade creditor exposure. Choosing it when the approval track would suffice is a common and costly mistake.

How does the step-by-step procedure work?

We secured an arrangement for a logistics operator in the Mazowieckie region (autumn 2025), reducing total debt by 40% and extending repayment to 60 months. The process followed a clear sequence that applies across all DIP tracks, with timing variations.

Step one is financial diagnosis. Before filing anything, the debtor needs a restructuring plan (plan restrukturyzacyjny) and a preliminary list of creditors. The plan must demonstrate that the business is viable and that creditors will recover more under the arrangement than in liquidation. This is not a formality – courts reject plans that lack credible financial projections. Allow four to six weeks for a thorough plan.

Step two is appointing the restructuring adviser. For the approval track, the debtor appoints the adviser directly. For the other tracks, the court appoints a supervisor after the opening application. The adviser's fee is regulated: a minimum of PLN 3,000 per month for smaller proceedings, scaling with complexity. Adviser quality is critical. A well-connected adviser knows which creditors will negotiate and which will obstruct.

Step three is the creditor vote. Creditors are divided into groups with similar economic interests. Each group votes separately. An arrangement passes if creditors representing more than 50% in number and two-thirds in value within each group approve it. That threshold is achievable in most viable businesses – but only if the arrangement offers creditors a better outcome than insolvency liquidation.

  • Prepare financial projections covering at least 36 months
  • Map creditors by group, claim size, and likely voting behaviour
  • Secure informal support from the two or three largest creditors before filing
  • Confirm that disputed claims do not exceed 15% if using the approval track
  • File within the 30-day insolvency deadline to preserve the board liability defence

Step four is court approval and execution. The District Court reviews the vote and approves or rejects the arrangement. Approval is not automatic – the court checks procedural compliance and whether the arrangement is materially fair to dissenting creditors. Once approved, the arrangement binds all creditors in the relevant groups, including those who voted against it. Execution is monitored by the adviser or supervisor for the duration of the repayment period.

What are the most common mistakes in Polish DIP restructuring?

We obtained a stay of enforcement proceedings protecting assets worth over PLN 8m for a retail client in Małopolska (spring 2026), after the company had initially filed under the wrong track and needed to restart. That restart cost four months and significant adviser fees. The mistake was avoidable.

The first and most frequent mistake is waiting too long. Boards delay filing because they hope trading conditions will improve. Every week of delay narrows the window. If insolvency conditions have already been met, the 30-day clock is running. Filing restructuring proceedings after that deadline does not eliminate board liability – it merely shifts the argument to whether the filing was timely. Courts scrutinise the date carefully.

The second mistake is underestimating creditor opposition. Secured creditors – banks holding mortgages or pledges – have strong incentives to resist arrangements that reduce their recovery. Polish restructuring law allows secured creditors to be placed in a separate voting group. If that group rejects the arrangement, the court may still confirm it under a cross-class cramdown mechanism, but only if the arrangement does not leave those creditors worse off than in liquidation. Building that economic case requires detailed asset valuations prepared before filing.

The third mistake is mishandling the pre-pack option. Polish law allows a pre-pack sale (sale of an organised part of the enterprise) within restructuring proceedings. Pre-pack can protect key assets and preserve employment while shedding legacy liabilities. But a pre-pack that transfers assets to a related party at below-market value is a white-collar defence problem – prosecutors treat it as fraudulent conveyance. Pricing must be independently verified.

Cross-border complications arise when a Polish debtor has creditors or assets in other EU member states. The EU Insolvency Regulation (Recast) determines where the centre of main interests (COMI) sits and which jurisdiction's law governs. A Polish company with significant French operations may face parallel proceedings. For an analysis of how cross-border insolvency involving Poland and France operates in practice, see our dedicated guide at cross-border insolvency involving Poland and France.

Three business scenarios: manufacturing, IT, and foreign investor

Applying the framework to three common situations clarifies which choices matter most. Each scenario involves a different creditor structure, timeline pressure, and cost profile.

Manufacturing company. A mid-size manufacturer in Lower Silesia carries PLN 15m in bank debt and PLN 4m in trade creditor exposure. The bank holds a registered pledge over production equipment. Disputed claims are below 15%. The approval track is available and preferred. The restructuring adviser negotiates a haircut of 30% on trade debt and a five-year extension of bank debt repayment. The bank, facing a liquidation recovery of 50 cents on the euro, accepts. Total process time: four months. Adviser fee: PLN 60,000. Court fee: PLN 1,000.

IT company. A software house in Warsaw has no secured debt but owes PLN 3m to 60 trade creditors and faces a disputed claim of PLN 2m from a former partner – representing 36% of total liabilities. The approval track is blocked. Accelerated arrangement proceedings are the right choice. The court appoints a supervisor within two weeks of filing. The disputed claim is resolved during proceedings through a settlement, reducing it to PLN 800,000 and bringing it within the voting group. Arrangement approved at month five. Board liability clock was stopped on day 18 of the insolvency period.

Foreign investor. A German-owned subsidiary operating in Pomerania faces a liquidity crisis triggered by a customer insolvency. The parent wants to inject capital but needs certainty that Polish creditors cannot attach assets during the capital increase. Opening accelerated arrangement proceedings creates the moratorium. The parent completes the capital injection in month two. The arrangement offers creditors full repayment over 24 months. All creditor groups approve. The German parent's directors also need to understand their employment compliance obligations during restructuring – for context, see our analysis of employment law compliance for Poland companies in Poland. Total process time: five months.

Frequently asked questions

Q: How long does debtor-in-possession restructuring typically take in Poland?

A: The approval track closes in three to four months in straightforward cases. Accelerated arrangement proceedings take four to five months. Standard arrangement proceedings run six to twelve months, depending on the complexity of the creditor pool and whether any claims are contested before the court. These timelines assume the restructuring plan is filed promptly and the debtor cooperates fully with the appointed adviser or supervisor.

Q: Does opening restructuring proceedings protect directors from personal liability?

A: It can, but only if proceedings are opened within 30 days of insolvency conditions arising. Polish insolvency law provides that timely filing for either insolvency or restructuring proceedings interrupts the personal liability clock for board members. A filing made after that 30-day window has passed does not automatically eliminate liability – the board must then demonstrate that the delay did not worsen creditors' position. Directors facing this question should also review their D&O insurance coverage; our guide on what Polish directors need to know about D&O insurance coverage covers this in detail.

Q: Can secured creditors block an arrangement under Polish restructuring law?

A: Not automatically. Secured creditors are placed in a separate voting group. If that group rejects the arrangement, Polish restructuring law permits the court to confirm it anyway under a cross-class mechanism – provided the dissenting group is not left worse off than it would be in liquidation proceedings. The debtor must present independent asset valuations to support that comparison. In practice, banks rarely veto arrangements where the liquidation alternative is demonstrably worse for them.

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 financial distress, board liability exposure, and complex creditor negotiations. 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.