A Kraków-based distribution company watches its cash reserves drain through a single loss-making quarter. The board hesitates. Every week of delay narrows the options. Polish restructuring law offers a genuine second chance – but only if the board acts before insolvency becomes unavoidable and the debtor loses control of the process entirely.
Debtor-in-possession (DIP) restructuring under Polish law allows a company to restructure its debts while retaining management control, operating its business, and avoiding formal bankruptcy. The Prawo restrukturyzacyjne (Restructuring Law, PR) provides four distinct procedures, of which the przyspieszone postępowanie układowe (accelerated arrangement proceedings) and postępowanie sanacyjne (remedial proceedings) are most commonly used by mid-size companies. A court-supervised restructuring plan must be approved by creditors holding more than half the total value of claims before it becomes binding.
This guide walks through the step-by-step procedure, realistic timelines, cost ranges, and the three most common mistakes that cause DIP restructuring to fail in Poland. It covers three business scenarios – a manufacturing company, an IT services firm, and a foreign investor's subsidiary – and answers the questions boards actually ask before filing.
What is debtor-in-possession restructuring and when does it apply?
DIP restructuring under the Restructuring Law means the debtor keeps management control throughout the proceedings. The court appoints a supervisor or administrator, but day-to-day operations remain with the board. This distinguishes DIP restructuring from formal bankruptcy, where an administrator displaces management entirely. The key threshold: the company must be insolvent or threatened with insolvency. Threatened insolvency – meaning the board reasonably anticipates inability to meet obligations within 24 months – triggers the right to file earlier, before the situation becomes irreversible.
Polish restructuring law offers four procedures on a sliding scale of court involvement. The postępowanie o zatwierdzenie układu (arrangement approval proceedings) involves minimal court oversight and suits companies with straightforward creditor structures. The accelerated arrangement proceedings suit companies where disputed claims do not exceed 15 percent of total liabilities. The postępowanie układowe (standard arrangement proceedings) handles more complex creditor bases. Remedial proceedings grant the broadest tools – including termination of loss-making contracts – but impose a court-appointed administrator with co-signature rights. Each procedure has a different risk-to-control ratio.
The National Court Register (KRS) records the opening of proceedings, creating immediate public visibility. The Monitor Sądowy i Gospodarczy (Official Court and Economic Gazette, MSiG) publishes the announcement, triggering the automatic stay on enforcement. From that moment, individual creditor enforcement actions against assets covered by the arrangement are suspended. That stay is one of the most valuable features of Polish DIP restructuring – it buys time without requiring the debtor to surrender control.
One practical point worth flagging early: the Polish Financial Supervision Authority (KNF) must be notified where the debtor is a regulated entity. For ordinary commercial companies, no regulatory pre-clearance is required before filing.
How does the step-by-step procedure work in practice?
The procedure begins well before any court filing. Preparation typically takes four to eight weeks. The debtor assembles a list of creditors, calculates total liabilities, and drafts a preliminary restructuring plan. The plan must show that the arrangement is more advantageous to creditors than bankruptcy liquidation. That comparison – called the test likwidacyjny (liquidation test) – is central to creditor approval and must be supported by a financial projection covering at least two years post-arrangement.
Once the filing is submitted to the district court at the company's registered office, the court has two weeks to open proceedings (in accelerated arrangement proceedings). Standard arrangement proceedings allow the court up to six weeks. The court appoints a court supervisor (nadzorca sądowy) or, in remedial proceedings, an administrator (zarządca). The supervisor monitors compliance but does not run the business. The administrator in remedial proceedings has co-signature authority over transactions exceeding a threshold set by the court – commonly PLN 50,000 for mid-size companies.
After opening, the debtor has three months to finalise the arrangement proposal and submit it to the creditors' meeting. Creditors vote by value and by headcount. Approval requires a majority of creditors present and voting, representing more than half the total value of claims. If a creditor group is adversely affected, a cross-class cram-down mechanism allows the court to confirm the arrangement over that group's objection, provided the plan treats them at least as well as they would receive in bankruptcy. This cram-down tool, introduced in the 2022 amendments implementing the EU Restructuring Directive, meaningfully strengthens the debtor's position.
- Preparation phase: 4–8 weeks (creditor list, financial projections, draft plan)
- Court opening: 2–6 weeks depending on procedure type
- Creditors' meeting and vote: within 3 months of opening
- Court confirmation of arrangement: 2–4 weeks after vote
- Implementation phase: typically 2–5 years
We secured court confirmation of a restructuring arrangement for a manufacturing client in the Mazowieckie region within seven months of filing, protecting over PLN 8m in trade creditor claims (autumn 2025). Early preparation – particularly the liquidation test – was the deciding factor in creditor approval.
What are the costs and realistic timelines for Polish restructuring?
Cost is the question boards ask first. The direct court fees for accelerated arrangement proceedings are modest – the filing fee is PLN 1,000. The real cost lies in professional fees. A court supervisor charges fees set by the court based on the complexity of the case and the value of liabilities covered. For a company with PLN 5m–20m in liabilities, supervisor fees typically range from PLN 30,000 to PLN 150,000 over the full proceedings. Legal advisory fees for preparation, filing, and creditor negotiations add a further PLN 50,000–200,000 depending on creditor complexity.
Remedial proceedings are more expensive. The court-appointed administrator charges fees comparable to a supervisor but has broader authority, so engagement tends to be more intensive. Budget PLN 200,000–500,000 in total professional costs for a mid-size remedial case. These figures are estimates – actual costs depend on the number of creditors, the presence of secured creditors, and whether litigation arises during proceedings.
Timeline realism matters. Accelerated arrangement proceedings, well-prepared, can be completed in six to nine months. Standard arrangement proceedings typically take nine to fifteen months. Remedial proceedings – which involve deeper operational restructuring – commonly run twelve to twenty-four months. The EU Restructuring Directive required Poland to ensure that proceedings can be completed within twelve months for most cases; in practice, complex cases still exceed that target.
One structural cost that boards underestimate: management time. The board must engage actively with the supervisor, attend creditor meetings, and respond to information requests within tight deadlines. A company that enters restructuring without adequate internal capacity to support the process risks procedural failures that can cause the court to terminate proceedings – forfeiting the protection of the automatic stay entirely.
Which business scenarios benefit most from DIP restructuring?
Three scenarios illustrate where DIP restructuring delivers clear value. First, a manufacturing company with high fixed costs and a temporary demand shock. The automatic stay prevents equipment lessors and trade creditors from seizing assets during the adjustment period. An arrangement that stretches repayment over three to five years restores cash flow without asset liquidation. The liquidation test typically favours arrangement here because manufacturing assets lose significant value in forced sale.
Second, an IT services firm with recurring revenue but over-leveraged from an acquisition. The firm's value lies in contracts and people, not fixed assets. DIP restructuring allows the firm to restructure financial debt while preserving client relationships. Remedial proceedings give the additional tool of terminating the acquisition-related financing contract if its terms are unsustainable – a power unavailable outside formal proceedings. For cross-border matters involving creditors in other EU jurisdictions, the interaction between Polish proceedings and foreign enforcement is addressed in our guide on cross-border insolvency involving Poland and Sweden.
Third, a foreign investor's Polish subsidiary facing group-level liquidity pressure. The parent may be tempted to let the subsidiary enter bankruptcy to cut losses. DIP restructuring offers an alternative: the subsidiary files independently, the automatic stay blocks Polish creditor enforcement, and the group gains time to recapitalise or find a buyer. The pre-pack (pre-packaged arrangement) mechanism – where a buyer and sale terms are agreed before filing – can be combined with restructuring to transfer the business to a clean entity while resolving legacy liabilities. We have assisted a Silesian subsidiary of a German group in completing a pre-pack restructuring that preserved 120 jobs (winter 2025).
For foreign investors whose group has operations in multiple EU states, understanding how Polish proceedings interact with Italian creditor claims is equally relevant – see our analysis of cross-border insolvency involving Poland and Italy for the jurisdictional framework.
What mistakes cause DIP restructuring to fail – and how does board liability arise?
The most common mistake is filing too late. Polish corporate legislation imposes personal liability on board members who fail to file for insolvency within 30 days of the company becoming insolvent. DIP restructuring does not suspend that obligation – it satisfies it, provided the filing is timely. A board that waits until cash is exhausted before filing restructuring proceedings may simultaneously face personal liability for the period of delay. That liability is joint and several, covers the full value of unsatisfied creditor claims, and is not discharged by the arrangement itself.
The second mistake is underestimating the liquidation test. Creditors will reject an arrangement if they believe bankruptcy liquidation would yield more. A poorly prepared financial projection – one that overstates asset values or understates liquidation costs – destroys creditor confidence and produces a failed vote. A failed vote terminates the proceedings, lifts the automatic stay, and exposes the company to immediate enforcement. That outcome is irreversible in practice: once creditors have voted against, rebuilding trust for a second attempt is extremely difficult.
The third mistake involves employment obligations. Boards sometimes assume that restructuring automatically permits workforce reductions. It does not. Collective redundancy rules under Polish employment law apply in full during restructuring. Failure to follow the statutory consultation process – which requires at least 20 days of negotiations with employee representatives – exposes the company to claims that can themselves destabilise the arrangement. Employment risks during restructuring intersect with broader workforce compliance issues; boards managing staff changes should also review B2B reclassification risk and PIP enforcement powers if contractor arrangements are involved.
Board members facing restructuring should also be aware that white-collar defence considerations arise if the company's financial difficulties involved prior management decisions that could be characterised as preferential payments or fraudulent transfers. The supervisor has a duty to report such transactions to the public prosecutor. Awareness of this risk early – before filing – allows the board to assess exposure and take legal advice on defence strategy.
Specific failure triggers to monitor:
- Board fails to submit updated creditor list within 30 days of court request – proceedings may be terminated
- Debtor enters into transactions without supervisor co-signature where required – arrangement becomes voidable
- Arrangement proposal not submitted within the statutory period – court terminates proceedings
- Debtor fails to implement arrangement payments on schedule – creditors may apply to court for termination
Each of these failures forfeits the protection of the automatic stay and, in the worst case, converts a restructuring into bankruptcy with no further opportunity to preserve the business.
Every board considering restructuring should prepare the following before filing:
- Current creditor register with claim values and security interests
- Two-year financial projection with liquidation test comparison
- Draft arrangement proposal with proposed repayment terms
- Assessment of any voidable transactions in the 12 months before filing
- Employment headcount plan and collective redundancy timeline if applicable
Specific situations require tailored analysis. If your company is approaching the insolvency threshold or has already missed payments to key creditors, the window for DIP restructuring may be narrowing. To receive an expert assessment of your restructuring options before that window closes, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can a company continue trading normally during DIP restructuring proceedings?
A: Yes. The debtor retains management control and continues trading throughout accelerated arrangement and standard arrangement proceedings. In remedial proceedings, transactions above the court-set threshold require co-signature by the administrator – commonly PLN 50,000. Contracts with customers and suppliers remain valid unless the administrator exercises the specific right to terminate loss-making contracts, which requires court approval and applies only in remedial proceedings.
Q: How long does it realistically take to complete restructuring, and what does it cost?
A: Accelerated arrangement proceedings, well-prepared, typically complete in six to nine months. Standard arrangement proceedings take nine to fifteen months. Total professional costs for a company with PLN 5m–20m in liabilities range from PLN 80,000 to PLN 350,000 depending on creditor complexity and whether litigation arises. Court filing fees are low – PLN 1,000 for accelerated proceedings – but professional fees dominate the budget. Underprepared filings cost more, not less, because they generate disputes that extend the proceedings.
Q: Does opening restructuring proceedings protect the company from all creditor actions?
A: The automatic stay suspends individual enforcement actions against assets covered by the arrangement from the moment proceedings are opened. However, the stay does not cover all obligations. Secured creditors retain rights over collateral that is not included in the arrangement. Obligations arising after the opening of proceedings – new invoices, post-filing wages – must be paid on time and are not subject to the arrangement. A common misconception is that restructuring eliminates all payment obligations immediately; in fact, it restructures pre-filing debts while requiring the company to remain current on post-filing liabilities.
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.