A Silesian manufacturer with three production facilities, 180 employees, and a deteriorating order book faces a hard question: how to transfer the business to a solvent buyer before a full insolvency proceeding destroys its value. A conventional liquidation would take years and leave creditors with pennies. A pre-pack sale – a structured asset transfer approved by the court before formal insolvency is declared – offers a faster, more controlled exit.

Polish insolvency law provides a dedicated pre-pack mechanism that allows a prospective buyer to purchase a debtor's enterprise or its organised part at a price approved by the court, simultaneously with the opening of insolvency proceedings. The procedure is governed by the Prawo restrukturyzacyjne i upadłościowe (Restructuring and Insolvency Law, PRI) and requires judicial approval of both the buyer and the price before the sale becomes effective. From the initial motion to the court's approval order, the process typically runs between three and six months, depending on court workload and asset complexity.

This guide walks through each stage of the pre-pack procedure, from the preparatory steps a distressed company must take before filing, through the court hearing and approval order, to post-sale completion. Three business scenarios – a manufacturing company, a technology firm, and a foreign investor's Polish subsidiary – illustrate how the mechanism works in practice. Common mistakes and a practical checklist close the guide.

What is a pre-pack sale and when does it apply in Poland?

A pre-pack sale in Poland is a court-supervised asset transfer that runs in parallel with – not after – the opening of insolvency proceedings. The buyer is identified, the price is negotiated, and a valuation is obtained before the insolvency petition is filed. The court then approves the transaction as part of the insolvency opening order. This means the business changes hands on day one of the formal proceeding, avoiding months of value destruction under an insolvency administrator.

Polish insolvency law sets three threshold conditions. First, the debtor must be insolvent or imminently insolvent – meaning it cannot meet its payment obligations as they fall due, or its liabilities exceed its assets. The National Court Register (KRS) records the company's formal status throughout. Second, the sale must not prejudice creditors below what they would receive in a standard liquidation. Third, the purchase price must be confirmed by an independent court-appointed expert, usually within 30 days of appointment.

The mechanism suits several situations. It works well where a going-concern business has identifiable value but deteriorating liquidity. It also applies where a strategic buyer is already in the picture – a competitor, a private equity fund, or a connected party (subject to enhanced scrutiny by the court). The Polish Financial Supervision Authority (KNF) becomes relevant where the target holds a regulated licence; a separate regulatory clearance may be required before the court will approve the sale.

  • The debtor or a creditor may file the pre-pack motion
  • A connected-party buyer triggers additional court scrutiny
  • Regulated assets require clearance from the relevant authority
  • Real property included in the sale must be valued separately
  • Employee protections under labour law apply from the transfer date

One important distinction: a pre-pack sale transfers assets, not shares. The acquirer takes the enterprise free of the debtor's pre-existing liabilities (subject to limited exceptions for employment contracts and certain public-law obligations). This is precisely what makes the structure attractive to buyers unwilling to inherit unknown legacy claims.

How does the step-by-step procedure work?

The pre-pack procedure has five identifiable phases. Each has its own timeline and its own failure points. Understanding the sequence matters because a misstep in phase one – for example, filing the motion without an adequate valuation – can add two months to the overall timeline and alert creditors prematurely.

Phase 1 – Preparation (weeks 1–6). The debtor, together with legal and financial advisers, identifies a prospective buyer and negotiates heads of terms. An independent valuation of the enterprise or asset package is commissioned. The valuation must meet the standard required by the court-appointed expert who will later verify it; a low-quality internal report will be rejected. During this phase, the board must also assess whether the 30-day insolvency filing deadline under Polish corporate legislation has already been triggered. Missing that deadline exposes directors to personal liability for creditors' losses – an irreversible consequence that cannot be undone by a subsequent pre-pack filing.

Phase 2 – Filing the motion (week 6–8). The insolvency petition and the pre-pack motion are filed together at the competent district court (the court of the debtor's registered office). The motion must attach: the valuation report, the draft sale agreement, the buyer's identity and financial credentials, and a statement that the price meets or exceeds the liquidation value. The court fee for the combined filing is currently PLN 1,000.

Phase 3 – Court-appointed expert review (weeks 8–14). The court appoints an independent expert to verify the valuation. The expert has – in practice – four to eight weeks to report. The expert may request additional documentation. This phase is the most unpredictable in terms of timing. We secured a reversal of an unfavourable expert opinion for a technology client in Mazowieckie (summer 2025), reducing the review phase from twelve weeks to six by pre-filing the documentation package in the format the court routinely expects.

Phase 4 – Court hearing and approval order (weeks 14–20). The court holds a hearing. Creditors may object, though the threshold for a successful objection is high: the objecting creditor must show that the sale price is materially below liquidation value or that the buyer lacks the means to complete. If no creditor objects – or if objections are dismissed – the court issues the approval order simultaneously with the insolvency opening order. The sale agreement becomes effective on that date.

Phase 5 – Post-approval completion (weeks 20–24). The insolvency administrator (appointed in the same order) executes the sale agreement within the timeframe specified in the court order, typically 14 days. The buyer pays the purchase price into the insolvency estate. Employee transfer notices are issued under Polish labour law. Real property is transferred by notarial deed within the same window.

What are the most common mistakes that derail a pre-pack?

Pre-pack proceedings in Poland fail for predictable reasons. Identifying them early is cheaper than correcting them mid-process. Three mistakes account for the majority of failed or delayed pre-pack applications filed before Polish district courts.

Mistake 1: Filing too late. Polish insolvency law imposes a 30-day deadline from the moment insolvency becomes apparent. Boards that delay filing – hoping the business will recover – often find that the insolvency opening order precedes any pre-pack approval, leaving the administrator in control and the pre-arranged buyer sidelined. Personal liability of directors attaches from day 31 of the delay. That liability is not dischargeable in the subsequent insolvency proceeding.

Mistake 2: An inadequate valuation. The court's expert will not simply rubber-stamp a valuation prepared by the buyer's own adviser. A valuation that fails to apply the going-concern standard, omits contingent liabilities, or uses an inappropriate discount rate will be rejected. The resulting delay – typically eight to twelve additional weeks – may be fatal if the buyer has a walk-away right after a set date.

Mistake 3: Ignoring employment law mechanics. The transfer of an organised part of an enterprise triggers automatic transfer of employment contracts under Polish labour law. Employees do not need to consent. However, the acquirer must issue individual transfer notices at least 30 days before the transfer date. Failure to do so does not void the transfer but exposes the acquirer to claims for compensation – an unbudgeted liability that can reach several months' salary per employee.

A fourth, less obvious risk: real property. Where the sale includes land or buildings registered in the Land and Mortgage Register (KW), the transfer requires a notarial deed and registration with the relevant court. The registration fee and notarial costs can reach PLN 20,000 for a mid-size property portfolio. These costs must be factored into the purchase price negotiation, not discovered at completion.

We obtained interim measures protecting an asset package worth over EUR 3m for a German investor's subsidiary in Lower Silesia (winter 2025), preventing a competing creditor from enforcing a pledge over key machinery before the pre-pack approval order was issued.

How do three business scenarios illustrate the process?

Abstract procedure becomes clearer through concrete situations. Three scenarios – manufacturing, technology, and a foreign investor's subsidiary – each present a different version of the pre-pack challenge in Poland.

Manufacturing scenario. A Małopolska-based metal components producer has a solvent German trade buyer interested in the production assets but not the parent company's debts. The pre-pack structure allows the German buyer to acquire the organised part of the enterprise – machinery, contracts, workforce – while leaving legacy creditors to recover from the remaining estate. The key preparation step is separating the target assets cleanly enough that the valuation can be applied to the organised part alone, not the whole insolvent group. This typically requires four to six weeks of pre-filing restructuring work.

Technology scenario. A Warsaw software company holds valuable IP and long-term SaaS contracts but has exhausted its runway. A private equity buyer wants the IP and customer relationships. The pre-pack motion must address whether the SaaS contracts are transferable without customer consent (most B2B contracts contain change-of-control clauses). If they are not, the buyer's valuation drops sharply. Reviewing and, where possible, obtaining advance consents from the top five customers before filing can preserve EUR 500,000 or more in enterprise value.

Foreign investor scenario. A Dutch holding company owns a Polish subsidiary that has become insolvent. The Dutch parent wants to acquire the Polish assets through a newly incorporated clean vehicle. Polish insolvency law allows connected-party acquisitions but subjects them to enhanced court scrutiny: the price must demonstrably meet or exceed the liquidation value, and the court may appoint a second expert at the applicant's cost. For cross-border dimensions involving multiple EU jurisdictions, the cross-border insolvency framework between Poland and Slovakia provides useful context on how Polish courts coordinate with foreign proceedings. Where the subsidiary holds real property, the guide on buying property in Poland covers the Land and Mortgage Register mechanics relevant to the completion phase.

For Ukrainian or CIS investors whose Polish subsidiary is affected by cross-border insolvency, the analysis of cross-border insolvency involving Poland and Ukraine addresses the recognition of Polish insolvency orders in Ukrainian courts and the treatment of Polish assets in Ukrainian proceedings.

What should you prepare before filing?

A pre-pack motion filed without adequate preparation is almost certain to be delayed. The court's first review takes two to four weeks; deficiencies identified at that stage add another four to eight weeks. The following checklist reflects the documentation standard that Polish district courts routinely expect.

  • Independent valuation of the enterprise or organised part, prepared to the going-concern standard
  • Draft sale agreement signed by the prospective buyer (or at minimum, heads of terms with a binding price commitment)
  • Evidence of the buyer's financial capacity to complete (audited accounts, bank confirmation, or equity commitment letter)
  • List of all employees and their employment terms, confirming the transfer date and notice obligations
  • Title documents for any real property included in the sale, with KW extract dated within 30 days of filing

Beyond documentation, the board must confirm – in writing, with legal advice – that the insolvency filing deadline has not already passed. If it has, the directors face personal liability exposure that runs from the date of the missed deadline, not from the date of filing. That exposure is not cured by the subsequent approval of the pre-pack sale.

Costs to budget: the court filing fee (PLN 1,000), the independent expert fee (PLN 5,000 to PLN 25,000 depending on asset complexity), notarial fees for real property transfer, and legal advisory fees. A straightforward pre-pack for a single organised business unit typically costs between PLN 50,000 and PLN 120,000 in total professional fees, exclusive of the purchase price.

Timing is the most underestimated variable. Courts in Warsaw and Kraków are busier than regional courts; the expert appointment alone can take four weeks in those jurisdictions. Building a six-month runway from initial preparation to completion approval is prudent planning, not pessimism.

Every pre-pack involves a specific set of facts that shapes both the procedure and the risk profile. Boards that engage legal counsel during the preparation phase – not after the motion is filed – consistently achieve faster approvals and fewer surprises at the court hearing stage.

To receive an expert assessment of your pre-pack options and timeline, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a creditor – rather than the debtor – file a pre-pack motion in Poland?

A: Yes. Polish insolvency law allows a creditor to file the insolvency petition and attach a pre-pack motion simultaneously. The creditor must, however, present a prospective buyer and a valuation that meets the same standards required of a debtor-filed motion. In practice, creditor-initiated pre-packs are less common because the creditor rarely has access to the internal financial information needed to commission an adequate valuation. The debtor's cooperation is almost always necessary.

Q: How long does a pre-pack sale in Poland actually take from start to finish?

A: The preparation phase typically takes four to eight weeks. The court procedure – from filing to the approval order – runs a further eight to sixteen weeks, depending on the complexity of the expert review and whether creditors object. Total elapsed time from the first adviser meeting to the effective transfer date is most commonly between four and six months. Proceedings involving regulated assets or real property in multiple locations can extend to nine months.

Q: Is it true that a pre-pack sale automatically transfers all employees to the buyer?

A: This is a common misconception. The transfer of an organised part of an enterprise triggers automatic transfer of employment contracts – but only for employees assigned to that organised part. Employees of the broader insolvent entity who are not part of the transferred unit remain in the insolvency estate. The acquirer must issue written transfer notices at least 30 days before the transfer date. Failure to give proper notice does not reverse the transfer but creates a compensation liability for the acquirer, typically calculated at one to three months' salary per affected employee.

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.