On paper, debtor-in-possession restructuring looks like a lifeline. In practice, the procedure carries hard deadlines, strict eligibility thresholds, and personal liability traps that catch boards off guard. Polish restructuring law has evolved significantly, and the gap between what directors think they know and what the statute actually requires is wider than most expect.
Debtor-in-possession (DIP) restructuring under Polish law allows a company to reorganise its debts while management retains operational control – subject to court supervision and a court-appointed supervisor. The Prawo restrukturyzacyjne (Restructuring Law, PR) provides four distinct procedures, of which the accelerated arrangement procedure and the arrangement procedure are most commonly used by mid-sized businesses. The debtor must demonstrate insolvency or a threat of insolvency to qualify, and the opening of proceedings automatically suspends most enforcement actions for up to four months.
This alert explains what the DIP framework requires, which companies are affected by the key thresholds, and what boards must do immediately to avoid forfeiting the protection the procedure offers.
What does debtor-in-possession restructuring actually change?
The defining feature of DIP restructuring in Poland is that the board stays in place. Unlike formal insolvency, where a court-appointed administrator displaces management, the PR allows the debtor to manage its own assets throughout the proceedings. That control is not unconditional. A court supervisor – registered with the National Court Register (KRS) and licensed by the Ministry of Justice – monitors every significant transaction. Disposals above the ordinary course of business require supervisor consent or are void.
The suspension of enforcement is the most immediate practical benefit. Once the District Court (Sąd Rejonowy) opens proceedings, bailiff enforcement against the debtor's assets is stayed. Creditors holding security over movable assets cannot enforce unilaterally during this window. The stay lasts up to four months from opening, with a possible extension to twelve months in arrangement proceedings – giving management a structured runway to negotiate with creditors.
Board liability is directly affected. Directors who file for restructuring in good time – within 30 days of the company becoming insolvent – generally avoid personal liability for the company's unsatisfied obligations. Missing that window forfeits this protection and exposes board members to claims by creditors and, in some cases, white-collar defence exposure under criminal statutes.
Who is affected and what are the thresholds?
Any Polish commercial entity – a spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.) or a spółka akcyjna (joint-stock company, S.A.) – may apply for DIP restructuring if it is insolvent or faces a genuine threat of insolvency. Insolvency under Polish law has two tests: a liquidity test (payment delays exceeding three months) and a balance-sheet test (liabilities exceeding assets for more than 24 months). Meeting either test is sufficient to qualify.
The choice of procedure depends on the creditor structure. Where more than 15% of creditors by value are disputed, the accelerated arrangement procedure is unavailable and the company must use the standard arrangement or remedial proceedings instead. For companies with fewer than 100 creditors and no disputed claims above that threshold, the simplified pre-pack route – formally the postępowanie o zatwierdzenie układu (approval-of-arrangement proceedings) – can be completed without a court hearing, often within three to four months.
- Liquidity insolvency: payment delays exceeding three months
- Balance-sheet insolvency: liabilities exceed assets for more than 24 months
- Disputed creditors above 15% by value: accelerated procedure unavailable
- Fewer than 100 creditors: simplified pre-pack route accessible
- 30-day filing window: mandatory from the date insolvency is established
Foreign-owned subsidiaries face an additional layer. Where the parent is domiciled outside Poland, the Polish Financial Supervision Authority (KNF) may need to be notified if the entity holds a regulated licence. Cross-border insolvency rules under EU Regulation 2015/848 determine which member state's courts have primary jurisdiction – a point that matters acutely when assets or creditors span multiple countries. For cross-border scenarios involving neighbouring jurisdictions, see our analysis of cross-border insolvency involving Poland and Slovakia and cross-border insolvency involving Poland and Switzerland.
We secured court approval of a restructuring plan for a manufacturing client in Mazowieckie (autumn 2025), where disputed trade creditors initially exceeded the 15% threshold. Early engagement with the three largest creditors reduced the disputed portion below the threshold within six weeks, unlocking the accelerated procedure and cutting the overall timeline by nearly three months.
What must boards do immediately?
Speed is not optional. The 30-day filing obligation runs from the moment the board knew or should have known that the company became insolvent. Courts assess this objectively. A board that waits for a formal audit opinion before filing will not necessarily be treated as having acted in good time – the clock starts when the financial signals are clear, not when paperwork confirms them.
Three immediate actions matter most. First, document the date on which insolvency was first identifiable. This record is the primary defence against personal liability claims. Second, instruct a licensed restructuring adviser to assess which of the four procedures is appropriate. The choice is consequential: selecting the wrong procedure wastes weeks and may require a fresh application. Third, review all material contracts for change-of-control or insolvency trigger clauses before filing, since opening proceedings can accelerate obligations if those clauses are not managed proactively.
Arbitration clauses in commercial contracts also require attention at this stage. Restructuring proceedings do not automatically stay arbitral proceedings, and a creditor holding an arbitration clause may seek an award during the restructuring window. For guidance on how Polish courts treat such clauses, see our note on arbitration clauses in Polish contracts.
Our team obtained a stay of parallel arbitral proceedings for a technology services company in Lower Silesia (spring 2026), preventing a creditor from converting a disputed claim into an enforceable award during the arrangement vote. The intervention preserved the debtor's negotiating position and allowed the arrangement to pass with the required majority.
Specific situations require specific advice. If your company is approaching the 30-day filing deadline or has already identified insolvency triggers, the window for protecting board members from personal liability is closing. To receive an expert assessment of your restructuring options, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can a company continue trading normally once DIP restructuring proceedings are opened?
A: Yes, in most cases. The debtor retains management control and may continue ordinary business operations. Transactions outside the ordinary course – such as asset sales above a court-set threshold or new borrowing – require prior consent from the court-appointed supervisor. Transactions completed without that consent are legally void and may expose directors to liability.
Q: How long does the arrangement procedure typically take, and what does it cost?
A: The simplified approval-of-arrangement procedure can conclude in three to four months where creditors cooperate. The standard arrangement procedure typically runs six to twelve months. Costs include court fees, supervisor remuneration (set by statute as a percentage of covered liabilities), and adviser fees. Supervisor remuneration in mid-sized cases commonly ranges from PLN 50,000 to PLN 300,000 depending on the complexity and size of the creditor pool.
Q: Is it a misconception that restructuring automatically prevents insolvency proceedings?
A: Yes. Opening restructuring proceedings does not guarantee that insolvency proceedings will never follow. If the arrangement is rejected by creditors or the court refuses to approve it, the court may convert the case to formal insolvency proceedings. The debtor's ability to avoid that outcome depends on creditor support secured before the arrangement vote – which is why early creditor engagement, not just court filing, is the critical variable.
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.