A Warsaw-based technology company is running out of cash. Its core business still has value – a loyal client base, proprietary software, and a team of 40 engineers. But the balance sheet is broken, and a standard insolvency process would take 18 to 24 months, destroying precisely the assets that make the business worth saving. There is a faster route. Polish restructuring law offers a mechanism that allows a distressed business to be sold as a going concern, with court approval, before formal insolvency proceedings consume what remains.
A pre-pack sale in Poland – known formally as a przygotowana likwidacja (prepared liquidation, pre-pack) – is a court-supervised procedure under the Prawo restrukturyzacyjne (Restructuring Law) and the Prawo upadłościowe (Insolvency Law) that allows a distressed debtor's business or key assets to be sold to a pre-identified buyer at a price approved by the court. The buyer acquires assets free of the debtor's liabilities. The entire process from filing to court approval typically spans four to eight weeks.
This guide walks through each step: how to qualify, how to structure the bid, what the court examines, what the timeline looks like in practice, and where deals fall apart. Three business scenarios – a manufacturing company, a foreign-owned subsidiary, and a technology firm – illustrate how the procedure adapts to different fact patterns.
What is the Polish pre-pack mechanism and who can use it?
The pre-pack is not a restructuring plan. It is a sale mechanism embedded inside insolvency proceedings. The debtor (or a creditor) files a motion for bankruptcy and simultaneously submits a separate application asking the court to approve a specific sale to a specific buyer at a specific price. The National Court Register (KRS) records the insolvency filing. The court appoints a temporary supervisor or trustee to verify the proposed transaction terms.
Eligibility is straightforward. Any entity that meets the Polish insolvency threshold – inability to meet financial obligations as they fall due, or where liabilities exceed assets – may file. This covers limited liability companies (spółka z ograniczoną odpowiedzialnością, sp. z o.o.), joint-stock companies (spółka akcyjna, S.A.), and sole traders. Foreign subsidiaries registered in Poland are equally eligible. The Polish Financial Supervision Authority (KNF) must be notified separately if the debtor holds a regulated licence.
The buyer's identity must be disclosed at the time of filing. Anonymous bids are not accepted. The buyer can be a third party, a competitor, a private equity fund, or – under carefully managed conditions – a connected party. Connected-party bids receive closer scrutiny from the court-appointed trustee, and the valuation must be supported by an independent appraisal. Courts in Mazowieckie have consistently required two independent valuations where the buyer and debtor share common shareholders.
One important limitation: the pre-pack mechanism does not discharge the debtor's directors from liability for obligations incurred before the sale. Board liability under Polish corporate legislation continues independently. If the board delayed filing by more than 30 days after insolvency arose, personal liability for unpaid creditors may survive the transaction – an irreversible consequence that no pre-pack structure can neutralise.
How is the pre-pack application structured and filed?
The application has two parts filed simultaneously. First, the standard bankruptcy petition with the competent district court (sąd rejonowy). Second, the pre-pack motion containing the proposed sale price, the identity of the buyer, and a valuation report prepared by a licensed valuer. Both documents must be filed together. Filing the bankruptcy petition without the pre-pack motion – even one day earlier – forfeits the mechanism entirely, an irreversible procedural misstep.
The valuation report is the single most contested element. Polish insolvency law requires the proposed price to reflect the market value of the assets being transferred. "Market value" in a distressed context is interpreted by courts as the price achievable in an orderly sale within a reasonable timeframe – typically 90 to 180 days. A valuation that simply mirrors the buyer's offer will be rejected. The report must be prepared by a property valuer (rzeczoznawca majątkowy) certified under Polish law, or by a licensed restructuring adviser for business valuations.
We secured court approval of a pre-pack sale for a manufacturing client in the Mazowieckie region (autumn 2025), where the initial valuation was challenged by a secured creditor. The solution was commissioning a second independent report and presenting both to the court with a reconciliation note. Total preparation time from mandate to filing: six weeks.
What to prepare before filing:
- Independent valuation report covering all assets included in the sale
- Signed letter of intent or conditional sale agreement with the proposed buyer
- List of all creditors with outstanding amounts and security interests
- Board resolution authorising the filing and approving the proposed terms
- Evidence of the insolvency trigger (management accounts, bank statements)
The court fee for a pre-pack motion is PLN 1,000. Legal and advisory costs vary significantly by transaction size, but a realistic budget for a mid-market pre-pack – assets between PLN 5m and PLN 50m – runs from PLN 80,000 to PLN 200,000, covering legal counsel, the valuation, and the trustee's fee.
What does the court examine, and how long does approval take?
Once the motion is filed, the court has 14 days to appoint a temporary trustee (tymczasowy nadzorca sądowy or syndyk). The trustee's job is to verify three things: that the debtor is insolvent, that the proposed price is not below market value, and that the transaction does not unfairly prejudice creditors. The trustee submits a written opinion, typically within 21 days of appointment. The court then schedules a hearing.
In practice, the hearing takes place 35 to 55 days after filing in Warsaw courts. Regional courts outside the capital have moved faster – some Silesian courts have issued approval within 28 days of filing. The total timeline from filing to final court order approving the sale therefore runs four to eight weeks in most cases. Complex transactions, or those with objecting secured creditors, can extend to 12 weeks.
The court's approval order is the key document. It authorises the trustee to execute the sale agreement with the buyer. The buyer pays the agreed price into the insolvency estate. Assets transfer free of all pre-existing encumbrances – including mortgages, pledges, and tax liens registered against the debtor. This "clean title" effect is the mechanism's primary commercial attraction.
For cross-border transactions, the interaction between Polish insolvency proceedings and foreign security interests requires careful analysis. A German lender holding a pledge over Polish assets, for example, must be notified under the EU Insolvency Regulation. The timeline may extend by two to three weeks to accommodate cross-border notification obligations. For a detailed treatment of Polish-German insolvency interactions, see our guide on cross-border insolvency involving Poland and Germany.
What are the three business scenarios where pre-pack applies?
Understanding the mechanism in the abstract is one thing. Seeing how it applies across different fact patterns clarifies where it works, and where it does not.
Manufacturing company. A mid-sized manufacturer in Lower Silesia holds valuable production equipment and long-term supply contracts but has accumulated unsustainable debt to a single bank creditor. The bank holds a registered pledge over the machinery. A pre-pack allows the buyer to acquire the production line and the contracts, while the bank's claim is satisfied from the sale proceeds – at a negotiated discount agreed before filing. The board avoids the reputational damage of a prolonged insolvency. The 40-person workforce is retained by the buyer. Timeline: six weeks from mandate to court order.
Foreign-owned subsidiary. A German parent company holds a Polish subsidiary that has become insolvent following a contract termination. The parent wants to transfer the subsidiary's client relationships and IT infrastructure to a newly incorporated Polish entity before the insolvency administrator locks down all assets. A pre-pack, filed simultaneously with the bankruptcy petition, allows the transfer at court-approved market value. The parent must ensure the intercompany pricing withstands scrutiny – both from the Polish trustee and from the Polish tax authority. For dividend and capital repatriation issues that arise after the sale, see our analysis of dividend distribution rules for Polish companies.
Technology firm. A Warsaw-based SaaS company with recurring revenue but mounting convertible debt is approached by a competitor. The competitor wants the software and the client contracts, not the liabilities. A pre-pack structures the acquisition as a distressed asset sale rather than a share acquisition, protecting the buyer from inherited liabilities. The key risk here is employee transfer: Polish labour law provides that employees transfer automatically to the buyer in a business sale (przejście zakładu pracy). The buyer must account for this in its due diligence and pricing.
Our team obtained interim court protection for assets worth over EUR 3m for a technology client in Pomerania (spring 2026), preserving the going-concern value while the pre-pack application was processed. The buyer completed its due diligence during the court review period, reducing post-approval execution risk to near zero.
What are the most common mistakes and how can they be avoided?
The pre-pack mechanism is technically demanding. Four patterns of failure appear repeatedly in Polish practice.
Filing too late. The pre-pack works only if the business retains going-concern value at the time of filing. Boards that delay filing – hoping for a commercial turnaround that does not arrive – often reach the point where the valuation no longer supports a meaningful sale price. Insolvency law sets a 30-day deadline from the onset of insolvency for filing. Every week of delay beyond that point increases personal liability exposure and erodes the asset base. The consequence is irreversible: a business worth PLN 8m in January may be worth PLN 2m by March.
Inadequate valuation. Courts reject pre-pack motions where the valuation is superficial or where the valuer's methodology is unclear. A valuation that simply references the buyer's offer as evidence of market value will be dismissed. The report must apply a recognised methodology – discounted cash flow, comparable transactions, or net asset value – and explain why that methodology is appropriate for the specific asset class.
Undisclosed connected-party relationships. Failing to disclose that the proposed buyer is connected to the debtor's shareholders or management is the fastest route to criminal exposure under white-collar defence principles in Polish law. The trustee will investigate. Concealment constitutes an offence under Polish criminal law and may result in the transaction being set aside entirely.
Ignoring employee transfer obligations. Buyers who structure the acquisition without accounting for automatic employee transfer under Polish labour law face unexpected cost exposure post-completion. The pre-pack does not override employment law. Due diligence must cover headcount, collective agreements, and any pending employment claims before the sale price is fixed.
For cases where the debtor has cross-border operations involving Czech entities, the interaction between Polish and Czech insolvency proceedings adds a further layer of complexity. See our analysis of cross-border insolvency involving Poland and the Czech Republic for jurisdiction-specific guidance.
Specific situations require tailored assessment. If your company is approaching insolvency and holds assets that retain going-concern value, the window for a pre-pack is measured in weeks, not months. To receive an expert assessment of your restructuring options, contact info@kordeckipartners.com.
Frequently asked questions
Q: Can a pre-pack be used if the debtor is already in formal insolvency proceedings?
A: The pre-pack motion must be filed simultaneously with the bankruptcy petition – it cannot be added after proceedings have commenced. Once a trustee has been appointed in standard bankruptcy proceedings, the pre-pack route is closed. This is one reason why early legal advice is essential: the mechanism is available only at the moment of filing, and that moment passes quickly. There is no procedural remedy if the deadline is missed.
Q: How long does the entire pre-pack process take from first instruction to asset transfer?
A: A realistic timeline is 10 to 14 weeks from first legal instruction to completion of the asset transfer. Preparation – including valuation, buyer identification, and document drafting – typically takes four to six weeks. Court review and approval adds another four to eight weeks. Post-approval execution of the sale agreement and transfer of title can be completed within five business days of the court order. Transactions involving regulated assets or cross-border elements take longer.
Q: Does the pre-pack sale protect the buyer from the debtor's tax liabilities?
A: This is a common misconception. The clean-title effect of a pre-pack covers most civil-law encumbrances – mortgages, pledges, and contractual claims. However, certain tax liabilities that are not yet formalised as claims at the time of sale may, under Polish tax law, follow the business rather than the debtor. Buyers must conduct targeted tax due diligence covering VAT, CIT, and social security arrears. The trustee's opinion does not substitute for independent tax analysis. A tax adviser should be engaged in parallel with insolvency counsel from the outset.
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 distressed asset transactions. We work with Polish entrepreneurs, foreign investors, and in-house legal teams navigating complex pre-pack and insolvency procedures. 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.