A Kraków-based distribution company misses two consecutive loan covenants. The bank threatens enforcement. The board asks whether filing for insolvency is the only way out. In many cases, it is not. Polish restructuring law offers a procedure that lets the company keep control of its assets and operations while negotiating with creditors – without surrendering management to an external administrator.

Debtor-in-possession (DIP) restructuring under Polish law allows a financially distressed company to restructure its debts while retaining day-to-day control of the business. The procedure is governed by the Prawo restrukturyzacyjne (Restructuring Law, PR), which entered into force in 2016 and introduced four distinct restructuring pathways. In the most common DIP variant – the przyspieszone postępowanie układowe (accelerated arrangement proceedings) – the court appoints a supervisor rather than a full administrator, and the debtor continues to manage its affairs subject to defined consent thresholds.

This guide walks through the step-by-step procedure, key timelines, cost benchmarks, and the three most common mistakes companies make when entering DIP restructuring in Poland. It also covers three business scenarios – manufacturing, IT, and foreign investor – and answers the questions boards most frequently raise before filing.

What is debtor-in-possession restructuring and when does it apply?

Polish restructuring law provides four procedures on a spectrum from light supervision to full administrator control. DIP restructuring sits at the lighter end. The debtor retains management rights; a court-appointed supervisor (nadzorca sądowy) monitors compliance and must consent to acts exceeding ordinary management. The threshold for consent is set by the court at the opening stage and typically covers asset disposals above a defined PLN value.

The procedure is available when the company is insolvent or threatened with insolvency. "Threatened with insolvency" is a deliberately broad concept under Polish law – a company need not yet be unable to pay its debts; it is sufficient that, based on a reliable economic assessment, insolvency is likely within the foreseeable future. This gives boards a meaningful window to act before the situation becomes irreversible.

Two conditions must be met at the opening stage. First, the restructuring plan must be credible – the court reviews whether a realistic arrangement with creditors is achievable. Second, opening the procedure must not harm creditors. Courts in Warsaw (Sąd Rejonowy dla m.st. Warszawy, the District Court for the Capital City of Warsaw) and Kraków have interpreted this condition permissively in recent years, favouring restructuring over liquidation where asset values would otherwise erode.

One practical consideration: DIP restructuring does not automatically stop enforcement by secured creditors. An automatic stay covers unsecured claims from the moment the court issues its decision, but mortgage creditors and pledgees retain enforcement rights unless the court grants a separate protective measure. Boards should factor this into their pre-filing strategy – particularly where the company's key assets are encumbered.

How does the step-by-step procedure work in practice?

The accelerated arrangement procedure – the most common DIP route – runs in five distinct stages, each with its own deadline. Missing a deadline at any stage risks dismissal of the proceedings, which may force the company directly into insolvency. The total timeline from filing to arrangement approval typically runs between four and six months, though complex creditor structures can extend this to nine months.

Stage one is preparation. The debtor prepares a preliminary restructuring plan (wstępny plan restrukturyzacyjny), a list of creditors, and a list of disputed claims. These documents must be filed simultaneously with the petition. Incomplete filing is the single most common reason for procedural delay. The National Court Register (Krajowy Rejestr Sądowy, KRS) is checked to confirm the company's current registered data before submission.

Stage two is the court's opening decision. The court examines the petition and, if satisfied, issues an opening decision within two weeks. From that moment, enforcement proceedings against the debtor's assets are stayed (with the secured-creditor caveat noted above). The court simultaneously appoints the supervisor.

Stage three is creditor voting. The debtor circulates the arrangement proposal to creditors, who vote within the timeframe set by the court – typically 30 days. An arrangement is approved if creditors holding more than half the total admitted claims (by value) vote in favour. Different creditor groups may be created, each voting separately.

  • Prepare preliminary restructuring plan and creditor lists before filing.
  • Confirm secured creditor positions and negotiate standstills pre-filing.
  • Identify disputed claims early – they affect voting thresholds.
  • Budget for supervisor fees (typically PLN 15,000–50,000 depending on complexity).
  • Plan management bandwidth – the board remains operationally responsible throughout.

Stage four is court confirmation. Once creditors vote in favour, the court confirms the arrangement. This is not automatic – the court checks that the arrangement does not harm dissenting creditors disproportionately. Stage five is execution: the debtor implements the arrangement under ongoing supervisor oversight, with the supervisor filing periodic compliance reports to the court.

What are the three most common mistakes – and how do they trigger personal liability?

The most damaging mistake is filing too late. Polish insolvency law imposes a 30-day deadline on board members to file for insolvency once the company meets the statutory insolvency test. A board that delays filing – hoping conditions will improve – and then files for restructuring outside that window faces personal liability for the full amount of creditors' unsatisfied claims. This liability is joint and several, and it is irreversible once the limitation period runs.

We secured a reversal of a restructuring dismissal for a manufacturing client in the Mazowieckie region (autumn 2025). The original filing had been submitted without a credible preliminary restructuring plan, which the court had treated as a fatal defect. Resubmission with a properly structured plan and an updated creditor list resulted in the proceedings being opened within three weeks.

The second mistake is underestimating the impact on key contracts. DIP restructuring does not automatically terminate contracts, but counterparties often invoke change-of-control or material adverse change clauses once the court's opening decision is published in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy). Boards should audit key contracts before filing and, where possible, obtain waivers or comfort letters from strategic suppliers and customers.

The third mistake is treating the supervisor as an adversary. The supervisor's role is to protect creditors, but a well-briefed supervisor can also help the debtor by validating the plan's credibility with the court. Companies that engage the supervisor early – sharing financial models and explaining assumptions – consistently achieve faster confirmation timelines than those that treat the relationship as purely formal.

Board liability is a live concern throughout the procedure. Under Polish corporate legislation, directors who take acts outside ordinary management without supervisor consent may face personal liability for resulting losses. The threshold for "ordinary management" is fact-specific, but as a rule of thumb any single transaction exceeding PLN 500,000 warrants prior supervisor approval. Acting without that approval precludes the company from invoking the transaction as valid against the restructuring estate.

How do three business scenarios shape the DIP strategy?

The right DIP strategy depends heavily on the company's business model, creditor composition, and the nature of its distress. Three scenarios illustrate the divergence.

A Polish manufacturing company with significant fixed assets and bank debt will typically prioritise securing a standstill with its principal lender before filing. Banks registered with the Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) are sophisticated creditors with internal restructuring teams. Early bank engagement – ideally resulting in a term sheet before the petition is filed – dramatically increases the probability of arrangement approval. The preliminary restructuring plan should model at least two recovery scenarios: a going-concern arrangement and a controlled asset sale (pre-pack). For background on pre-pack mechanics in cross-border situations, see our analysis of cross-border insolvency involving Poland and Hungary.

An IT company presents a different profile. Its most valuable assets are intangible – software, customer contracts, and key personnel. Creditors are often trade creditors rather than banks. The risk is customer attrition: a court opening decision published in the official gazette may trigger termination clauses in SaaS or outsourcing agreements. The DIP strategy here should focus on pre-filing customer communication, contractual waivers, and a rapid creditor voting process to minimise the period of uncertainty.

A foreign investor – say, a German group with a Polish operating subsidiary – faces an additional layer of complexity. The subsidiary's restructuring in Poland may trigger disclosure obligations or financial covenant breaches at group level. Foreign parent companies should review their Polish subsidiary's loan agreements for cross-default clauses before the filing date. Boards of Polish subsidiaries should also be aware that foreign investment screening rules administered by the Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów, UOKiK) may apply if the restructuring involves a change of control. Our guide on foreign investment screening in Poland and UOKiK powers sets out the applicable thresholds.

Across all three scenarios, one factor consistently determines outcome: the quality of the preliminary restructuring plan. Courts assess credibility, not optimism. A plan that projects full debt repayment within 12 months without credible cash flow assumptions will be dismissed. A plan that proposes a 60% haircut supported by audited financial data and a realistic operational forecast has a far higher confirmation rate.

Directors concerned about their personal exposure during restructuring should also review the D&O insurance implications. Our article on D&O insurance coverage and what Polish directors need addresses the coverage gaps that commonly arise in distressed situations.

To receive an expert assessment of your company's restructuring options, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a company continue signing new contracts during DIP restructuring?

A: Yes. The debtor retains management rights and may enter new contracts as part of ordinary business operations. Contracts that exceed the ordinary management threshold – typically set by the court at a specific PLN value – require prior supervisor consent. Entering such contracts without consent does not automatically void them, but the supervisor may challenge them as harmful to the restructuring estate, which creates significant legal uncertainty for the counterparty.

Q: How long does DIP restructuring typically take, and what does it cost?

A: The accelerated arrangement procedure runs four to six months in straightforward cases. Complex creditor structures or disputed claims can extend the timeline to nine months. Costs include court filing fees (currently PLN 1,000 for the petition), supervisor remuneration (typically PLN 15,000–50,000), and legal advisory fees. Companies should also budget for the management time required to prepare creditor communications and respond to supervisor information requests throughout the procedure.

Q: Is DIP restructuring a mark against the company's credit history?

A: A common misconception is that opening restructuring proceedings permanently impairs the company's creditworthiness. In practice, a successfully confirmed and executed arrangement is viewed by many lenders as evidence of operational resilience. The opening decision is published in the Court and Commercial Gazette, so the proceedings are public – but the relevant question for future lenders is whether the arrangement was fulfilled. Companies that complete restructuring with a clean compliance record have successfully obtained new financing within 12 to 18 months of arrangement execution.

Specific aspects of your company's situation require careful analysis before a filing strategy can be finalised. Acting without that analysis – particularly where the 30-day insolvency filing deadline is running – forfeits the protection that DIP restructuring provides and may trigger personal liability for the entire board.

If your company is facing debt pressure, creditor enforcement, or covenant breaches, we will assess your restructuring options, prepare the preliminary restructuring plan, and coordinate with the court-appointed supervisor throughout the procedure: 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, 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.