A Mazowieckie-based manufacturing company misses two consecutive loan covenants. The bank accelerates. Directors face a hard choice: file for bankruptcy and lose control of the business, or move quickly into a restructuring procedure that keeps management in the saddle. Polish law offers exactly that second path – debtor-in-possession (DIP) restructuring – but the window for using it effectively is measured in weeks, not months.
Under the Prawo restrukturyzacyjne (Restructuring Law, PR), a debtor-in-possession restructuring allows an insolvent or threatened-insolvent company to negotiate with creditors while retaining day-to-day management control. The procedure is opened by the District Court (Sąd Rejonowy) and supervised by a court-appointed restructuring adviser. Critically, filing a restructuring petition before insolvency becomes irreversible suspends the obligation to file for bankruptcy and shields directors from personal liability for company debts.
This alert explains which DIP procedures are available, who is affected by the thresholds that trigger board liability, and what immediate steps management should take. The analysis is relevant to Polish limited liability companies, joint-stock companies, and foreign investors operating Polish subsidiaries.
What DIP restructuring procedures does Polish law provide?
Polish restructuring law offers four distinct procedures. Three of them preserve debtor-in-possession status – meaning the existing board retains management authority throughout the process. The fourth (sanacja, or remedial restructuring) can restrict that authority if the court appoints a court administrator. Each procedure suits a different level of financial distress and creditor complexity.
The fastest route is the postępowanie o zatwierdzenie układu (arrangement approval procedure, PZU). The debtor collects creditor votes independently, without court involvement, and then applies for judicial approval. The entire cycle can close in under four months. No court supervision applies during the voting phase. This makes PZU attractive for companies with a manageable creditor base and a pre-negotiated restructuring plan.
The second option is przyspieszone postępowanie układowe (accelerated arrangement procedure, PPU). It is designed for cases where disputed claims do not exceed 15% of total liabilities. The National Court Register (Krajowy Rejestr Sądowy, KRS) records the opening of PPU, which immediately triggers a stay on enforcement. Creditors vote within roughly three months of opening.
The standard postępowanie układowe (arrangement procedure, PU) applies when disputed claims exceed 15%. It takes longer – typically six to twelve months – but gives the debtor more time to negotiate complex claim structures. All three procedures leave the board in operational control, subject to supervision by a court-appointed restructuring adviser (nadzorca sądowy).
- PZU – fastest, no court during voting, suits pre-negotiated plans
- PPU – disputed claims below 15%, enforcement stay from day one
- PU – disputed claims above 15%, longer timeline, fuller creditor negotiation
- Sanacja – deepest intervention, may restrict board authority
Choosing the wrong procedure wastes time and money. We obtained a successful PPU opening for a logistics operator in Pomerania (spring 2025), converting an imminent enforcement action into a structured creditor vote completed within 90 days.
When does board liability arise – and how does DIP restructuring affect it?
Board liability under Polish corporate legislation is the sharpest risk in any distress scenario. Directors of a spółka z ograniczoną odpowiedzialnością (limited liability company, sp. z o.o.) face personal liability for unsatisfied company debts if they fail to file for bankruptcy within 30 days of the company becoming insolvent. That 30-day clock is unforgiving. Missing it forfeits the statutory exemption and exposes directors to claims by individual creditors.
Insolvency under Polish law is triggered by one of two tests. The first is the liquidity test: the company has been unable to pay its due obligations for more than 24 months. The second is the balance-sheet test: liabilities exceed assets for more than 24 months. Either condition, once met, starts the 30-day countdown. Directors who cannot demonstrate timely action risk personal liability for the full shortfall – an irreversible consequence that white-collar defence counsel cannot easily undo after the fact.
DIP restructuring interrupts this mechanism. Filing a valid restructuring petition before the 30-day bankruptcy deadline suspends the obligation to file for bankruptcy for the duration of the proceedings. The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) and the Office of Competition and Consumer Protection (Urząd Ochrony Konkurencji i Konsumentów, UOKiK) may still scrutinise regulated entities, but the personal liability clock stops. This is the single most important protective effect of DIP restructuring for directors.
One misconception deserves correction: directors sometimes believe that a creditor-initiated bankruptcy petition removes their obligation to act. It does not. The board must still file its own petition or open a restructuring procedure within the statutory window. Waiting for creditors to move first is a common and costly mistake.
What immediate steps should management take now?
Speed determines whether DIP restructuring remains available. Once a court opens bankruptcy proceedings on a creditor's petition, the restructuring window closes. The board loses control, a trustee is appointed, and personal liability exposure crystallises. Acting within the first 14 days of identifying distress signals is not a best practice – it is a legal necessity.
The first step is a rapid solvency assessment. Management should commission a cash-flow projection covering at least 13 weeks and a balance-sheet test against current liabilities. This assessment must be documented. If either insolvency test is met, the 30-day clock is already running. For cross-border groups, the analysis should account for EU Regulation 2015/848 on insolvency proceedings, which determines which member state's courts have jurisdiction – a point explored in detail in our guide on cross-border insolvency involving Poland and Ukraine.
The second step is selecting and engaging a licensed restructuring adviser (doradca restrukturyzacyjny). Under Polish restructuring law, the adviser must be licensed by the Ministry of Justice. Engaging an unlicensed consultant does not satisfy the statutory requirement and will not protect directors. The adviser prepares the restructuring plan and, in PZU, supervises the creditor vote.
What to prepare before the first adviser meeting:
- Current balance sheet and profit-and-loss statement (last two financial years)
- Full creditor list with claim amounts and due dates
- List of ongoing enforcement proceedings and their stages
- Key contracts with termination-on-insolvency clauses identified
- Board resolution authorising restructuring proceedings
The third step is assessing whether a pre-packaged sale (pre-pack) should run alongside or instead of a DIP arrangement. Pre-pack under Polish law allows the sale of the business or its organised part at a court-approved price, often within weeks of filing. It is particularly relevant where the operating business has value but the legal entity carries unmanageable legacy debt. Groups with Swiss or other non-EU parent structures should also review our analysis of cross-border insolvency involving Poland and Switzerland before selecting a restructuring vehicle. For disputes that may arise during negotiations, the enforceability of resolution clauses matters – see our note on arbitration clauses in Polish contracts.
We secured a restructuring plan approval for a retail group in Małopolska (autumn 2025), reducing total debt by over PLN 8m and preserving 140 jobs – achieved by filing PZU within 12 days of the initial distress assessment.
Every day of delay narrows the available options. If the court opens bankruptcy on a creditor's petition before the DIP filing reaches the registry, the procedure is unavailable. That outcome is irreversible.
Your company's specific situation – the solvency test results, creditor composition, and enforcement timeline – determines which procedure applies and how much time remains. To receive an expert assessment of your restructuring options before the window closes, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can a company open DIP restructuring if it is already technically insolvent?
A: Yes. Polish restructuring law permits opening proceedings for companies that are already insolvent, provided a bankruptcy petition has not yet been granted. The key condition is filing before the court opens bankruptcy. Companies that are merely "threatened with insolvency" – meaning insolvency is likely within 12 months – may also file, giving them more time to act before the 30-day bankruptcy deadline is triggered.
Q: How long does a DIP restructuring procedure take, and what does it cost?
A: Timeline varies by procedure. The arrangement approval procedure (PZU) can close in three to four months. The accelerated arrangement procedure (PPU) typically takes three to six months. The standard arrangement procedure (PU) runs six to twelve months. Costs include court filing fees (currently PLN 1,000 for most petitions), the licensed adviser's remuneration (set by the court based on the size of the estate), and legal counsel fees. Adviser remuneration in mid-size cases commonly ranges from PLN 30,000 to PLN 150,000 depending on complexity.
Q: Does opening restructuring proceedings stop all enforcement actions against the debtor?
A: An enforcement stay applies automatically upon opening of PPU, PU, and sanacja proceedings. Under PZU, the stay does not apply automatically during the voting phase – the debtor may apply to the court for interim protection, but this is not guaranteed. The stay covers enforcement of claims covered by the arrangement. Certain secured creditors and claims excluded from the arrangement (such as employee wages) are treated differently under Polish restructuring law.
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.