A Silesian manufacturing company is facing a liquidity crisis. Its core business remains viable – the production line is modern, the client base is loyal – but the balance sheet carries legacy debt that no operational fix can resolve. The board knows that a standard insolvency proceeding will take years and destroy most of the enterprise value in the process. There is a faster path. Pre-pack sale in Poland offers a way to transfer the business to a new owner within weeks, not years, while keeping the workforce intact and preserving going-concern value.
A pre-pack sale (przygotowana likwidacja, or "pre-pack") in Poland is a court-supervised procedure under restructuring and insolvency law that allows the sale of a debtor's enterprise – or an organised part of it – to a pre-selected buyer at a price approved by the court, typically within two to four months of filing. The buyer acquires assets free of most encumbrances, while the proceeds are distributed to creditors. The procedure is available in both restructuring and bankruptcy proceedings, and it requires a formal motion filed together with the insolvency petition.
This guide walks through the full pre-pack procedure in Poland: the legal framework, step-by-step timeline, costs, three business scenarios, common mistakes, and a practical checklist. Whether you are a distressed business owner, a potential acquirer, or an in-house counsel watching a counterparty deteriorate, the sections below give you the operational picture you need.
What is a pre-pack sale and when does it apply in Poland?
Polish insolvency law introduced the pre-pack mechanism formally in 2016, building it into the framework of the Prawo restrukturyzacyjne (Restructuring Law) and the Prawo upadłościowe (Insolvency Law). The core idea is simple: negotiate the sale before the court declares bankruptcy, then have the court confirm it at the moment of declaring bankruptcy. Speed is the defining advantage. A conventional liquidation bankruptcy can run three to six years; a pre-pack sale can close in as little as six to ten weeks after the court ruling.
The procedure applies when the debtor is insolvent – meaning it cannot meet its financial obligations as they fall due – or when insolvency is imminent. The National Court Register (KRS) filing history of the company is one of the first things an administrator and court will examine. The sale motion must identify the buyer, specify the purchase price, and include a valuation prepared by a licensed expert. The court appoints a temporary supervisor or administrator who verifies that the proposed price represents fair market value and that the transaction serves creditors' interests.
Three conditions must be satisfied for the court to approve the sale:
- The offered price equals or exceeds the estimated value in a liquidation scenario.
- The buyer is not a related party unless the court grants a specific exception.
- The motion is filed simultaneously with – or as part of – the bankruptcy petition.
One practical point often missed by foreign investors: the pre-pack does not require creditor consent at the outset. The court acts as gatekeeper. This distinguishes it sharply from a consensual debt restructuring, where holdout creditors can block progress for months.
How does the step-by-step procedure work?
The pre-pack procedure in Poland follows a defined sequence. Each phase has a hard deadline or a judicial discretion window that shapes the overall timeline. Missing a step – or filing an incomplete motion – resets the clock and may force the debtor into standard bankruptcy with no buyer waiting.
Phase one is preparation, which typically takes four to eight weeks before any court filing. The debtor (or a potential acquirer approaching the debtor) commissions a valuation of the enterprise or its organised part. The valuation must be prepared by a court-certified expert and address going-concern value, liquidation value, and the proposed sale price. Simultaneously, the parties negotiate and sign a conditional sale agreement. The agreement is conditional on court approval – it does not transfer title yet.
Phase two is the filing. The bankruptcy petition and the pre-pack motion are submitted together to the district court (Sąd Rejonowy) with jurisdiction over the debtor's registered office. The filing package includes: the petition, the conditional sale agreement, the expert valuation, and evidence of the debtor's insolvency. The court fee for a bankruptcy petition is PLN 1,000; the pre-pack motion carries an additional fee of PLN 1,000.
Phase three is the court review. The court has two weeks to appoint a temporary supervisor and up to six weeks to hold a hearing. In practice, courts in Warsaw and Kraków schedule hearings within four to six weeks of filing. The temporary supervisor reviews the valuation and submits an opinion – typically within two to three weeks of appointment. If the opinion is favourable, the court proceeds to the hearing. If the supervisor raises objections, the parties may need to renegotiate the price or provide supplementary documentation.
Phase four is the ruling. The court simultaneously declares bankruptcy and approves the sale. Title transfers to the buyer upon payment of the agreed price, which must occur within thirty days of the ruling becoming final. The buyer acquires the assets free of the seller's tax liabilities (with limited exceptions) and free of most security interests that do not follow the assets explicitly under the sale terms.
What are the costs and timeline in numbers?
One of the most common misconceptions about pre-pack is that it is expensive relative to a standard sale. The opposite is often true. Court fees are modest – PLN 2,000 in total for the petition and motion. The expert valuation costs between PLN 15,000 and PLN 80,000 depending on the complexity of the enterprise. Legal fees for preparing the motion, negotiating the conditional agreement, and representing the parties at the hearing typically range from PLN 30,000 to PLN 120,000. The total transaction cost for a mid-market pre-pack – an enterprise valued at PLN 10m to PLN 50m – rarely exceeds PLN 200,000 on the seller's side.
The timeline depends heavily on court workload and the quality of the filing. A well-prepared, complete filing in a court with moderate caseload produces the following schedule:
- Weeks 1–8: preparation (valuation, conditional agreement, due diligence).
- Weeks 9–10: filing and court registration.
- Weeks 11–14: temporary supervisor review and hearing preparation.
- Weeks 15–16: court hearing and ruling.
- Weeks 17–18: payment and title transfer.
That is four to five months end-to-end in a standard scenario. Aggressive preparation – starting the valuation before filing – can compress the total to ten to twelve weeks. Conversely, an incomplete filing or a contested valuation can extend the process by two to three months, during which the business continues to deteriorate. We secured court approval for a pre-pack sale of a logistics operator in the Mazowieckie region (autumn 2025), completing the full process – filing to title transfer – in eleven weeks from the initial mandate.
What are the three business scenarios where pre-pack is the right tool?
Not every distressed business is a pre-pack candidate. The procedure works best when three elements align: a viable operating core, an identified buyer, and a compressed timeline driven by commercial necessity. Below are the three scenarios where pre-pack consistently outperforms alternatives.
Scenario one – manufacturing company. A mid-size manufacturer in Silesia carries secured bank debt from an expansion project that the market downturn made unserviceable. The production assets and client contracts have real value. A strategic buyer – a competitor or a private equity fund – is willing to pay PLN 12m for the organised part of the enterprise. Standard bankruptcy would take three years and destroy the client relationships. Pre-pack delivers the assets to the buyer within four months, the bank recovers more than in liquidation, and the workforce of 180 people remains employed. Board liability for delayed insolvency filing is addressed by filing the petition promptly – personal liability of directors attaches when the filing is delayed beyond the statutory deadline.
Scenario two – IT services company. A Warsaw-based software house has lost its anchor client and cannot service a convertible loan. Its intellectual property, development team, and recurring contracts are worth acquiring. The buyer is a foreign investor who needs a clean acquisition – no legacy liabilities, no pending litigation following the assets. Pre-pack provides exactly that: the buyer acquires the IP and contracts free of the seller's obligations. The transaction closes in eight weeks. For cross-border dimensions of this type of deal, the analysis at cross-border insolvency involving Poland and Spain illustrates how EU insolvency regulation interacts with Polish proceedings.
Scenario three – foreign investor's Polish subsidiary. A German group's Polish subsidiary has accumulated intercompany debt that cannot be forgiven without triggering adverse tax consequences. The group wants to restructure the Polish operations without triggering a full insolvency in Germany. Pre-pack allows the Polish subsidiary to sell its operating assets to a new Polish entity (a clean SPV) while the insolvent shell is wound down. The group retains the business; the creditors receive fair value. Questions about subsidiary liability within Polish corporate groups are addressed separately at subsidiary liability in Polish corporate groups.
Across all three scenarios, the irreversible consequence of delay is the same: every week without a filed pre-pack motion is a week in which enterprise value erodes, key employees leave, and the buyer's willingness to pay the agreed price weakens.
For businesses that have also attracted scrutiny from the tax authority – a common pattern in distressed situations – understanding what a KAS audit involves is useful background; the guide on KAS tax audit: what to expect and how to prepare covers that process in detail.
What are the most common mistakes and how do you avoid them?
Pre-pack proceedings in Poland fail – or produce significantly worse outcomes – when predictable errors are made early. The most damaging mistakes share a common feature: they are all avoidable with proper preparation.
Undervaluing the enterprise to favour the buyer. The court's primary obligation is to protect creditors. If the expert valuation is perceived as artificially low, the temporary supervisor will object and the court will reject the motion. The pre-pack then converts into standard bankruptcy with no buyer in place. The solution is to commission an independent valuation from a court-certified expert with no connection to either party, and to price the transaction at or above the liquidation floor.
Filing too late. Board members who delay the insolvency filing beyond the statutory deadline – thirty days from the onset of insolvency – face personal liability for the full amount of unsatisfied creditor claims. This liability is not extinguished by the pre-pack itself. It attaches to the board at the moment the deadline passes. We obtained a successful defence against personal liability claims for a board member of a retail chain in Małopolska (spring 2025), but that outcome required evidence that the filing was made within the statutory window.
Incomplete filing package. The district court will not process a pre-pack motion that lacks the conditional sale agreement, the expert valuation, or the insolvency evidence. Each missing document adds at least two to four weeks to the timeline. The court does not chase the parties for missing documents – it simply does not schedule a hearing.
Ignoring employee notification obligations. Polish labour law requires that employees be informed of a transfer of an organised part of an enterprise at least thirty days before the transfer date. Failure to notify opens the acquirer to employment claims. The pre-pack timeline must build in this window.
A checklist of what to prepare before filing is set out below.
- Expert valuation of the enterprise or organised part, signed and dated.
- Conditional sale agreement with the identified buyer, including price and conditions.
- Financial statements for the last two completed financial years and the current interim period.
- List of creditors with amounts, security interests, and maturity dates.
- Employee list and evidence of notification obligations compliance.
A specific situation may require additional documents – particularly where the enterprise holds regulated licences or operates in a sector supervised by the Polish Financial Supervision Authority (KNF). Licence transfer restrictions must be addressed before, not after, the court ruling.
Frequently asked questions
Q: Can a pre-pack sale be used in restructuring proceedings, or only in bankruptcy?
A: Polish law allows a pre-pack motion in both restructuring and bankruptcy proceedings. In practice, the mechanism is most commonly used in bankruptcy proceedings, where the court declaration of bankruptcy and the sale approval occur simultaneously. In restructuring, the procedure is less common because restructuring tools such as an arrangement with creditors may preserve more value for the debtor's shareholders. The choice between the two routes depends on whether the debtor's equity is worth preserving and whether creditors are likely to support an arrangement.
Q: How long does a pre-pack take from filing to completed sale, and what is the main variable?
A: From the date of filing to the date of title transfer, the process typically takes eight to eighteen weeks. The main variable is court caseload. Courts in Warsaw and Kraków are busier than regional courts and may schedule hearings four to six weeks after filing rather than two to three weeks. A complete, well-prepared filing package materially reduces the risk of adjournment. The temporary supervisor's opinion is the second variable: a straightforward valuation produces a short opinion; a disputed price produces a longer review and may require a supplementary expert report.
Q: Does the buyer in a pre-pack inherit the seller's tax liabilities?
A: This is a common misconception. In a properly structured pre-pack, the buyer does not inherit the seller's tax liabilities as a general rule. Polish tax law provides that the acquirer of an organised part of an enterprise is jointly and severally liable for the seller's tax obligations only up to the value of the acquired assets, and only for obligations that arose before the acquisition. Court-supervised pre-pack sales carry additional protection because the sale is approved by the court in the context of insolvency proceedings. However, the precise scope of tax liability transfer should be verified with a tax adviser before signing the conditional agreement, since the rules are fact-specific and exceptions apply.
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 navigating distressed situations. 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.