Preventive restructuring in Poland – four

A Silesian manufacturing group with three subsidiaries begins missing supplier payments in the second quarter of the year. Cash flow is tightening. Management suspects insolvency may follow within six months. At that point, the board faces a binary choice that most directors do not realise is binary: file for insolvency, or enter a formal restructuring procedure before insolvency crystallises. The second path – preventive restructuring – preserves the business, protects jobs, and, critically, shields directors from personal liability. The first path, chosen too late, forfeits all of that.

Polish restructuring law, consolidated in the Prawo restrukturyzacyjne (Restructuring Law, PR), provides four distinct preventive procedures available to companies that are insolvent or threatened with insolvency. These are: the arrangement approval procedure, the accelerated arrangement procedure, the arrangement procedure, and the remedial procedure. Each carries different timelines, creditor thresholds, and court involvement levels – ranging from minimal judicial oversight to a full court-supervised rehabilitation lasting up to two years.

This guide walks through each of the four procedures in sequence: eligibility conditions, step-by-step mechanics, realistic timelines and costs, common mistakes that practitioners see repeatedly, and three business scenarios showing how different company profiles map to different procedures. A FAQ section addresses the questions that boards most frequently ask before engaging restructuring counsel.

What triggers the right to open a preventive restructuring procedure in Poland?

Eligibility is the first gate. A debtor may open any of the four procedures if it is either already insolvent or merely threatened with insolvency – meaning that its economic situation indicates a likelihood of insolvency. This is a deliberately wide threshold. A company does not need to have missed a single payment to qualify. Boards that wait for actual default before consulting counsel consistently lose the most valuable window of opportunity.

The National Court Register (Krajowy Rejestr Sądowy, KRS) and the National Restructuring Register (Krajowy Rejestr Zadłużonych, KRZ) are the two institutional pillars of the system. The KRZ, introduced in 2021, made Polish restructuring proceedings fully electronic and publicly searchable. Every filing, every arrangement proposal, and every court decision appears there within days. Foreign creditors and counterparties can monitor proceedings in real time – a factor that affects how quickly a debtor must act once rumours of financial distress begin circulating.

Board liability is the sharpest incentive. Under Polish corporate legislation, directors who fail to file for insolvency within 30 days of the company becoming insolvent face personal liability for unsatisfied creditor claims. Opening a restructuring procedure within that window interrupts the clock. The consequence of missing the 30-day deadline is irreversible: personal liability attaches, and subsequent restructuring success does not erase it. That single rule drives more restructuring filings than any other factor in the PR.

Three eligibility checkpoints boards should review immediately:

Is the company unable to meet obligations as they fall due (liquidity insolvency)?
Do total liabilities exceed total assets by more than a nominal amount (balance-sheet insolvency)?
Has the board documented in writing that insolvency is merely threatened, not yet present?

Documentation matters. A board resolution dated before the insolvency threshold is crossed can determine whether directors retain access to the lighter procedures or are pushed toward the heavier remedial track.

How do the four procedures differ in structure and timeline?

The four procedures sit on a spectrum from creditor-light to court-heavy. Understanding that spectrum is the core analytical task for any adviser. The arrangement approval procedure (postępowanie o zatwierdzenie układu, PZU) sits at one end: no court involvement at the opening stage, a licensed restructuring adviser manages the process, and the debtor retains full management of its assets. The remedial procedure (postępowanie sanacyjne) sits at the other end: a court-appointed administrator takes over, management powers are suspended, and the court supervises every significant decision.

The arrangement approval procedure is the fastest. A restructuring adviser is appointed privately, the debtor collects creditor votes, and if the arrangement passes, the court merely approves it. The statutory protection period – during which enforcement actions against the debtor are stayed – lasts up to four months. Costs are the lowest of the four procedures, typically in the range of PLN 30,000 to PLN 80,000 in adviser fees for a mid-sized company, depending on the complexity of the creditor pool. This procedure works only where unsecured creditors holding more than 50 percent of total claims consent, and where the debtor's financial position is not so deteriorated as to require asset disposals or contract terminations.

The accelerated arrangement procedure (przyspieszone postępowanie układowe, PPU) adds a court filing at the outset but is designed to conclude within two to three months. It is available only where disputed claims do not exceed 15 percent of total claims – a threshold that eliminates many debtors with ongoing litigation. The court issues an opening decision within one week of filing. From that moment, enforcement stays attach automatically. This speed makes the PPU the preferred instrument for companies with a clean but stressed balance sheet.

The arrangement procedure (postępowanie układowe, PU) mirrors the PPU but carries no 15 percent cap on disputed claims. It is slower – typically four to six months to arrangement approval – and the court plays a more active supervisory role. A court-appointed arrangement supervisor monitors asset disposals above a statutory threshold. For companies with contested creditor lists, the PU is often the only viable track short of the remedial procedure.

The remedial procedure (postępowanie sanacyjne) is the most invasive. Management is replaced by a court-appointed administrator. The administrator may terminate onerous contracts, dismiss employees beyond normal employment law limits, and dispose of assets without creditor consent (subject to court approval). The timeline runs to 12 months, extendable to 18 or even 24 months in complex cases. Costs are correspondingly high. The remedial procedure is reserved for companies requiring deep operational restructuring – not merely financial rescheduling.

What does the step-by-step process look like for each track?

For the arrangement approval procedure, the sequence is: (1) appoint a licensed restructuring adviser; (2) prepare a restructuring plan and financial projections; (3) collect creditor votes within the protection period (maximum four months); (4) file for court approval within three weeks of the vote. If the arrangement is rejected or the period expires without a vote, the protection lapses and the debtor must choose another procedure or face insolvency. The entire process, when well-prepared, can close in eight to twelve weeks.

We secured arrangement approval for a logistics operator in the Mazowieckie region (autumn 2025), restructuring obligations of over PLN 15m across 40 creditors within ten weeks of adviser appointment. Early creditor engagement – before the formal protection period began – was the decisive factor.

For the accelerated arrangement procedure, the sequence adds a court filing before creditor voting begins. Step one: file the petition with the KRZ-linked district court, attaching a preliminary restructuring plan, a creditor list, and a statement of financial position. Step two: the court issues an opening decision, typically within seven days. Step three: the arrangement supervisor reviews the creditor list and calls a creditors' meeting. Step four: creditors vote. Step five: the court confirms the arrangement. Disputed claims above the 15 percent threshold at any point can derail this track and force a transfer to the standard arrangement procedure – adding months and cost.

The arrangement procedure follows the same five steps but without the 15 percent cap. The court-appointed supervisor has broader powers to challenge the debtor's creditor list, which means creditor disputes are resolved within the procedure rather than in parallel litigation. Boards should budget four to six months and adviser/supervisor fees of PLN 80,000 to PLN 200,000 for a company with total claims in the PLN 10m to PLN 50m range.

The remedial procedure begins with a court petition that must include a restructuring plan, a list of all assets, a full creditor register, and evidence that the debtor's situation cannot be resolved through the lighter procedures. The court appoints an administrator within two weeks. From that point, the board retains only residual advisory functions. Creditors form a creditors' council with oversight powers. The administrator presents a final arrangement proposal, creditors vote, and the court confirms. The irreversible consequence of entering this track without preparation is that management loses operational control – sometimes permanently, if the administrator's assessment of the business leads to a liquidation recommendation.

For cross-border proceedings involving Polish and German entities, the interaction between Polish restructuring procedure and EU Regulation 2015/848 on insolvency proceedings is directly relevant. More detail on that interaction appears in our guide on cross-border insolvency involving Poland and Germany.

Specific situations require tailored analysis before a procedure is chosen. Selecting the wrong track – for example, filing a PZU when disputed claims already exceed 15 percent of total obligations – wastes the protection period and may forfeit the 30-day board liability window entirely.

If your company is facing liquidity pressure or threatened insolvency, contact info@kordeckipartners.com. We will assess which of the four procedures fits your creditor structure, timeline, and operational needs – and we will do so before the window closes.

What are the most common mistakes that preclude a successful arrangement?

The single most common mistake is delay. Boards instinctively treat financial distress as a temporary cash-flow problem. They negotiate informally with banks, defer supplier payments, and avoid the stigma of a formal restructuring filing. By the time formal proceedings begin, the protection period is shorter, creditor goodwill is exhausted, and the 30-day board liability clock may already have run. Personal liability for directors is not a theoretical risk – it is the standard outcome when restructuring is entered too late.

The second mistake is creditor list inaccuracy. The PR requires a complete and accurate creditor register at the filing stage. Omitting a creditor – even inadvertently – can invalidate the arrangement. Courts have set aside approved arrangements where creditors discovered they had been excluded from the voting process. Reconstructing the creditor list under time pressure, after a filing has already been made, is expensive and sometimes impossible within the statutory deadlines.

We obtained a reversal of an enforcement measure threatening assets of over EUR 2m for a technology company in Lower Silesia (spring 2026), where the original filing had omitted a creditor holding a pledge over key machinery. Early intervention – before the court ruled on arrangement confirmation – preserved the procedure.

The third mistake is underestimating the arrangement proposal itself. Creditors vote on a concrete proposal: specific repayment percentages, timelines, and conditions. A proposal that offers creditors less than they would recover in insolvency will fail. Preparing a credible comparative analysis – showing creditor recovery in restructuring versus insolvency – requires financial modelling that many debtors attempt without professional support. The arrangement fails, the protection period lapses, and the company enters insolvency in a worse position than it started.

A checklist of what to prepare before any restructuring filing:

Board resolution documenting the financial assessment and the decision to restructure
Complete creditor register with claim amounts, security interests, and dispute status
12-month cash flow projection and balance sheet as of filing date
Draft restructuring plan with operational measures and repayment proposal
Identification of any pre-pack (przygotowana likwidacja) opportunities if liquidation of assets is contemplated alongside restructuring

Arbitration clauses in key contracts also require review before filing. A restructuring procedure can affect the enforceability of dispute resolution provisions in supplier and customer agreements. Our analysis of arbitration clause drafting for Polish contracts sets out the key considerations.

How do three different business profiles map to the four procedures?

Matching procedure to company profile is where the analytical work concentrates. Three scenarios illustrate the mapping most clearly.

Scenario one: manufacturing company with bank debt and supplier arrears. A mid-sized manufacturer in Wielkopolska has PLN 20m in bank debt and PLN 5m in overdue supplier invoices. No litigation is pending. The bank holds a mortgage over the production facility. This profile fits the accelerated arrangement procedure. Disputed claims are zero, so the 15 percent threshold is not an issue. The bank's secured claim is treated separately from unsecured supplier claims. The debtor proposes a 36-month repayment schedule to unsecured creditors and negotiates a standstill with the bank outside the procedure. Timeline: three months from filing to arrangement confirmation. Adviser cost: approximately PLN 60,000 to PLN 100,000.

Scenario two: IT services company with disputed contractor claims. A Warsaw-based software integrator has PLN 8m in undisputed obligations and PLN 3m in claims disputed in pending arbitration. The disputed amount exceeds 15 percent of total claims, which disqualifies the accelerated arrangement procedure. The standard arrangement procedure is the correct track. The court-appointed supervisor resolves the disputed claims within the procedure. Timeline: five to seven months. Cost: PLN 80,000 to PLN 150,000 in adviser and supervisor fees. The company retains management control throughout.

Scenario three: foreign investor's subsidiary requiring operational restructuring. A German investor holds a Polish subsidiary that has lost its main contract, carries PLN 40m in liabilities, and needs to terminate 30 percent of its workforce and exit two loss-making leases. Financial rescheduling alone will not restore viability. This profile points to the remedial procedure. The administrator can terminate employment contracts and leases within the statutory limits (which are wider than ordinary employment law permits). The investor should expect 12 to 18 months of proceedings and administrator fees of PLN 200,000 to PLN 400,000 or more. Cross-border coordination with the German parent's advisers is essential – see also our guide on cross-border insolvency involving Poland and Lithuania for comparable multi-jurisdiction dynamics.

One decision matrix summarises the mapping: if no disputed claims and light financial stress, choose PZU or PPU; if disputed claims above 15 percent, choose PU; if operational restructuring is required, choose the remedial procedure. The boundary between PZU and PPU turns on whether the debtor wants court protection from the outset (PPU) or is confident enough to collect votes privately first (PZU).

The choice between procedures has consequences that cannot be undone once a filing is made. Entering the wrong track forfeits statutory protection, triggers creditor enforcement, and may expose the board to personal liability for subsequent obligations.

If your company – or a client's company – faces any of the three scenarios above, email info@kordeckipartners.com. We will identify the correct procedure, prepare the filing documentation, and engage creditors before the formal opening – giving the arrangement the best possible chance of confirmation.

Frequently asked questions

Q: Can a company open a restructuring procedure if it has already missed payments to the tax authority?

A: Yes. Tax obligations owed to the Polish Tax Administration (Krajowa Administracja Skarbowa, KAS) are treated as ordinary unsecured claims in all four procedures, subject to the statutory rules on public-law creditor consent. Tax arrears do not disqualify a debtor from restructuring. However, KAS has specific consent rights in the arrangement voting process, and an arrangement that imposes a haircut on tax claims requires KAS approval or a court override. Boards should factor this into the arrangement proposal from the outset – a proposal that ignores KAS consent dynamics will typically fail at the voting stage.

Q: How long does board protection from personal liability last once a procedure is opened?

A: Opening any of the four procedures interrupts the 30-day insolvency filing obligation for the duration of the proceedings. Directors are not personally liable for obligations arising after the procedure is opened, provided they act within the limits set by the restructuring law and do not take actions that worsen the creditor position. If the procedure fails and insolvency follows, a new 30-day window begins from the date the court determines insolvency has crystallised. The protection is procedural – it does not retroactively erase liability that already attached before the filing.

Q: What does a restructuring procedure cost in total, and who pays?

A: Total costs vary significantly by procedure and company size. The arrangement approval procedure (PZU) is the least expensive: adviser fees typically range from PLN 30,000 to PLN 80,000 for a mid-sized debtor, plus court approval fees of a few thousand PLN. The remedial procedure can cost PLN 300,000 or more in administrator and court fees over an 18-month timeline. Court filing fees under the Restructuring Law are set at fixed statutory amounts – currently PLN 1,000 for the opening petition in most procedures. All costs are borne by the debtor's estate and are treated as priority claims in the event the procedure transitions to insolvency.

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 navigating distress situations across all four preventive restructuring tracks. To discuss your situation, contact info@kordeckipartners.com.