A Mazowieckie-based distribution company faces a liquidity crisis. Its core assets – a warehouse network and client contracts – retain real value. A conventional insolvency proceeding would take years and destroy that value through administrative delay. The pre-pack mechanism offers a different path: a court-supervised sale of the business as a going concern, agreed before the insolvency filing, completed within weeks of the court order.
Polish insolvency law provides a dedicated pre-pack procedure – formally known as the preparation for controlled liquidation (przygotowana likwidacja) – that allows a buyer and seller to agree sale terms before the insolvency petition is filed. The district court then approves the sale as part of the insolvency order itself, typically within two to four months of filing. The procedure preserves going-concern value, protects employees, and offers the buyer a clean title to assets, free from the seller's pre-existing liabilities.
This guide explains the pre-pack procedure step by step: how to prepare the application, what the court examines, realistic timelines, typical costs, and the three business scenarios where the mechanism works best. It also flags the most common mistakes that derail pre-pack applications in Poland.
What is the pre-pack procedure under Polish insolvency law?
Polish insolvency legislation introduced the pre-pack as a standalone mechanism within the Prawo upadłościowe (Insolvency Law, PU). The core idea is straightforward: a prospective buyer submits a binding offer before the court declares insolvency. The court appoints a temporary supervisor from the National Court Register (KRS) panel, who reviews the offer and issues an opinion. If the court accepts the offer, it issues the insolvency order and simultaneously approves the sale – all in a single ruling.
The mechanism differs from a standard asset sale in insolvency in one critical respect. The buyer acquires the business or its organised part free from encumbrances, including tax liabilities and social security arrears. This clean-title effect makes pre-pack attractive to trade buyers and private equity sponsors alike. The deadline for the temporary supervisor's opinion is typically 30 days from appointment, though courts in Warsaw and Krakow have processed opinions faster in straightforward cases.
- The buyer must be identified before the insolvency petition is filed.
- The offer price must equal or exceed the valuation prepared by a court-appointed expert.
- The application is filed with the district court (sąd rejonowy) at the debtor's registered office.
- The sale is completed by the court-appointed receiver, not the debtor's management.
- Employees employed in the transferred organised part transfer automatically under Polish labour law.
One practical point often overlooked: the pre-pack does not suspend the board's obligation to file for insolvency within 30 days of insolvency onset. Filing the pre-pack application alongside the insolvency petition – or immediately before it – is the only way to protect board members from personal liability exposure under Polish corporate legislation. For a detailed analysis of that exposure, see our guide on board liability under Polish corporate law.
How does the step-by-step procedure and timeline work?
The pre-pack procedure unfolds in four distinct stages. Each stage carries its own documentation requirements and time pressure. Missing a step – or submitting incomplete documents – resets the clock and risks the buyer walking away.
Stage 1 – Preparation (weeks 1–4). The debtor's management commissions an independent asset valuation. This valuation becomes the floor price: the court will not approve a sale below it. Simultaneously, the prospective buyer conducts due diligence and prepares a binding offer. The offer must specify the purchase price, the assets or business unit covered, and the conditions precedent – typically limited to court approval only, to avoid conditionality risk.
Stage 2 – Filing (day 1). The insolvency petition and the pre-pack application are filed together at the competent district court. The application must include the signed offer, the asset valuation, a description of the organised part or assets, and a statement from the debtor confirming the offer terms. Courts in Warsaw's Commercial Division XIII have processed initial hearings within three to six weeks of filing.
Stage 3 – Temporary supervisor review (weeks 3–8). The court appoints a temporary supervisor from the panel maintained by the Polish Financial Supervision Authority (KNF) and the Ministry of Justice. The supervisor verifies the valuation, assesses whether the sale price reflects market value, and issues a written opinion. The supervisor's fee is typically PLN 10,000–30,000, depending on asset complexity.
Stage 4 – Court hearing and order (weeks 8–16). The court holds a hearing, considers the supervisor's opinion, and issues a combined insolvency and sale-approval order. Once the order becomes final – after a seven-day appeal window – the court-appointed receiver executes the sale agreement. Total elapsed time from filing to completed transfer: two to four months in straightforward cases.
We secured a pre-pack approval for a logistics operator in Mazowieckie (autumn 2025), with the combined insolvency and sale order issued within eleven weeks of filing. The buyer – a regional competitor – acquired a fleet of 40 vehicles and three warehouse leases free of the seller's tax arrears exceeding PLN 3.5m.
What are the three business scenarios where pre-pack works best?
The pre-pack mechanism is not universally suitable. It performs best where assets retain going-concern value, the buyer is identified early, and speed is essential to preserve that value. Three scenarios illustrate the range.
Scenario 1 – Manufacturing company. A Silesia-based manufacturer of automotive components has significant machinery, IP licences, and long-term supply contracts. Conventional liquidation would terminate the contracts and scrap the machinery at recovery rates below 30%. A pre-pack allows a trade buyer to acquire the contracts and machinery as an organised part, preserving supplier relationships and retaining the workforce. The clean-title effect removes the buyer's exposure to the seller's VAT and social security debt – often the decisive factor in manufacturing transactions.
Scenario 2 – IT company. A software development firm in Małopolska holds valuable source code, client SaaS contracts, and a team of 25 engineers. The firm's liabilities are concentrated in convertible loan notes held by two investors. A pre-pack can transfer the business to a newco sponsored by one investor, preserving the team and contracts, while the loan-note debt remains in the insolvent estate. The process must be structured carefully to avoid challenge as a transaction at undervalue – which is why the independent valuation and court approval are protective, not merely procedural.
Scenario 3 – Foreign investor exit. A German parent company holds a Polish subsidiary that has become insolvent. The parent wants to exit the Polish market cleanly, without residual liability for the subsidiary's debts. A pre-pack sale to a third-party buyer, approved by the Polish district court, achieves a clean break. Cross-border elements – particularly where the parent has provided guarantees – require coordination between Polish insolvency counsel and the parent's German advisers. For the interaction between Polish and EU insolvency rules in cross-border structures, see our analysis of cross-border insolvency involving Poland and the Netherlands.
What are the most common mistakes that derail pre-pack applications?
Pre-pack applications fail for predictable reasons. Understanding the failure modes is as important as understanding the procedure itself.
Undervalued offer price. The single most common reason for rejection is an offer below the court-appointed valuation. Courts treat the valuation as a hard floor. If the buyer's offer is even marginally below the valuation figure, the court will refuse approval – and the insolvency proceeds without the pre-pack benefit. Commissioning a pre-application valuation, and stress-testing the offer price against it, is not optional. It is the foundation of a viable application.
Conditionality in the offer. Buyers sometimes submit offers with financing conditions or regulatory approval carve-outs. Courts treat conditionality as incompatible with the mechanism's purpose. The offer must be unconditional except for the court's own approval. Where merger control clearance is required – for example, where the transaction meets the thresholds reviewed by the Office of Competition and Consumer Protection (UOKiK) – the buyer must obtain pre-clearance before submitting the offer, or restructure the deal to fall below the thresholds. See our guide on UOKiK merger control thresholds and timeline for the relevant figures.
Late filing. Filing the pre-pack application after the board's 30-day insolvency deadline has expired does not invalidate the application, but it exposes board members to personal liability for the period of delay. Courts also view late filing as a signal of bad faith. The pre-pack application and the insolvency petition should be filed simultaneously, on the earliest possible date after the insolvency condition is established.
Incomplete documentation. Courts reject applications that lack a signed offer, a compliant valuation, or a description of the organised part. Each missing document adds weeks to the process – and risks the buyer exercising a walk-away right. A documentation checklist prepared at the outset prevents this failure mode.
We obtained a reversal of an initial court rejection for a retail client in Pomerania (winter 2025–2026), after supplementing the application with a revised valuation and an unconditional amended offer. The sale was ultimately approved within six weeks of the corrected filing.
What should you prepare before filing?
Preparation before the filing date determines whether the application succeeds. The following checklist covers the minimum documentation and steps required.
- Independent asset valuation prepared by a qualified expert, covering all assets included in the offer scope.
- Signed, unconditional binding offer from the buyer, specifying price, scope, and transfer conditions.
- Description of the organised part or asset pool, including employee headcount and contract inventory.
- Board resolution confirming insolvency status and authorising the filing.
- Analysis of merger control thresholds – confirm whether UOKiK notification is required before offer submission.
Costs vary by transaction size. Court filing fees for the insolvency petition are fixed by statute at PLN 1,000. The temporary supervisor's fee ranges from PLN 10,000 to PLN 30,000. Legal advisory costs for a straightforward pre-pack typically fall between PLN 30,000 and PLN 80,000, depending on asset complexity and whether cross-border elements are present. The receiver's fee is set by the court as a percentage of proceeds.
The total elapsed time – from first instruction to completed asset transfer – is realistically two to five months for a well-prepared application. Poorly prepared applications can extend that timeline to nine months or more, by which point going-concern value has often been substantially eroded.
Specific situations require tailored advice. A pre-pack involving a company with significant tax arrears, pending litigation, or cross-border group structures requires analysis that goes beyond the standard procedure. Failing to address those elements before filing can result in the court refusing approval or, worse, the sale being challenged post-completion as a transaction at undervalue – an irreversible outcome that forfeits the clean-title benefit entirely.
To receive an expert assessment of your pre-pack options, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can the pre-pack procedure be used if the company is not yet formally insolvent but insolvency is imminent?
A: Polish insolvency law permits the pre-pack application to be filed together with the insolvency petition, which is itself filed when the company meets the statutory insolvency test – either the payment-cessation test or the over-indebtedness test. The application cannot be filed before the insolvency condition is established, but preparation of the offer, valuation, and documentation can begin well in advance. Boards that identify insolvency risk early have more time to identify a buyer and prepare a compliant application.
Q: How long does it take to complete a pre-pack sale in Poland, and what does it cost?
A: A well-prepared pre-pack application typically results in a combined insolvency and sale-approval order within eight to sixteen weeks of filing. Completing the actual asset transfer takes a further two to four weeks after the order becomes final. Total elapsed time from filing to transfer is therefore two to five months. Costs include a PLN 1,000 court fee, a temporary supervisor's fee of PLN 10,000–30,000, and legal advisory fees that typically range from PLN 30,000 to PLN 80,000 for a straightforward transaction.
Q: Does the buyer in a pre-pack acquire the debtor's tax liabilities?
A: This is a common misconception. The buyer acquires the business or organised part free from the seller's tax liabilities, social security arrears, and other pre-existing encumbrances. This clean-title effect is the central legal advantage of the pre-pack mechanism and is expressly provided for under Polish insolvency legislation. The debtor's tax liabilities remain as claims in the insolvent estate, to be satisfied from the sale proceeds according to the statutory priority order. The buyer's exposure is limited to obligations arising after the transfer date.
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 pre-pack transactions. 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.