Preventive restructuring in Poland – four

A Mazowieckie-based distribution company misses two consecutive VAT payments. Trade creditors begin calling. The management board knows the business is viable – the problem is short-term liquidity, not a broken model. Yet the board does nothing, waiting for the situation to resolve itself. Six months later, insolvency proceedings are the only option left on the table.

Polish restructuring law provides four distinct preventive procedures that allow a company to restructure its debts before reaching the point of formal insolvency. Each procedure is governed by the Prawo restrukturyzacyjne (Restructuring Law, PRL), which came into force in 2016 and was significantly amended in 2022 to implement the EU Preventive Restructuring Directive. The four types are: arrangement approval proceedings, accelerated arrangement proceedings, arrangement proceedings, and remedial proceedings. Choosing the wrong type – or waiting too long – can forfeit the protection these procedures offer and expose board members to personal liability.

This guide walks through each procedure step by step, covering timelines, costs, eligibility conditions, and the most common mistakes businesses make when entering restructuring. Three business scenarios illustrate how the choice of procedure maps to real commercial situations.

What does Polish restructuring law actually offer?

Polish restructuring law operates on a single organising principle: a viable business should be saved before it becomes insolvent. The PRL separates restructuring from bankruptcy entirely. A company that files for restructuring gains an automatic stay against enforcement – meaning individual creditor actions are suspended from the moment the court opens proceedings. That stay can be worth more than any individual debt write-down.

The National Court Register (KRS) records the opening of every restructuring proceeding. The court with jurisdiction is the district court (sąd rejonowy) at the company's registered office. The court appoints a supervisor or administrator depending on the procedure chosen. The Polish Financial Supervision Authority (KNF) plays a role only where the debtor is a regulated entity – banks, insurers, and investment firms follow separate tracks.

One figure matters above all others: a company is presumed insolvent when its debts exceed its assets for more than 24 months. At that point, the board has 30 days to file for either restructuring or bankruptcy. Missing that 30-day window triggers personal liability of directors under Polish corporate legislation – a point explored in detail at board liability under Polish law. Restructuring is therefore not just a financial tool. It is a legal shield.

The four procedures differ along three axes: degree of court involvement, degree of debtor control over assets, and the threshold of creditor consent required to bind dissenting creditors. Understanding those axes is what drives the correct choice.

How do the four procedures differ in practice?

Each procedure occupies a distinct position on the spectrum from minimal court involvement to full judicial supervision. The right entry point depends on the complexity of the debt structure, the urgency of the enforcement threat, and the debtor's relationship with its major creditors.

Arrangement approval proceedings (postępowanie o zatwierdzenie układu) sit at the low-intervention end. The debtor negotiates an arrangement with creditors independently, without court supervision. A licensed restructuring adviser (doradca restrukturyzacyjny) is appointed privately. Once creditors holding more than 50 percent of total claims vote in favour, the debtor applies to the court for approval. The entire process can be completed in as little as three to four months. The key limitation: the debtor cannot bind dissenting secured creditors without their consent. This procedure suits companies with a concentrated creditor base and cooperative main lenders.

Accelerated arrangement proceedings (przyspieszone postępowanie układowe) introduce court supervision from the outset but keep the timeline short – typically four months from filing to arrangement approval. The debtor retains management of its assets under court supervision. A court-appointed supervisor (nadzorca sądowy) reviews transactions above a threshold set by the court. This procedure is available where disputed claims do not exceed 15 percent of total liabilities. It is the most frequently used procedure for mid-sized companies with straightforward debt structures.

Arrangement proceedings (postępowanie układowe) mirror accelerated proceedings but allow a higher threshold of disputed claims – above 15 percent. The timeline extends to around 12 months. Court involvement is heavier. This procedure suits companies where creditor disputes must be resolved before voting can take place.

Remedial proceedings (postępowanie sanacyjne) are the most intensive option. The court appoints an administrator (zarządca) who takes over management of the debtor's assets entirely. The board loses operational control. In exchange, the debtor gains the most powerful tools: the ability to terminate burdensome contracts, shed unprofitable employment contracts under simplified rules, and sell assets free of encumbrances. Remedial proceedings typically run 12 to 18 months. We secured an arrangement under remedial proceedings for a manufacturing client in Lower Silesia (spring 2025), protecting over PLN 8m in trade creditor claims and preserving 140 jobs.

Arrangement approval: no court supervision, 3–4 months, simple debt structures
Accelerated arrangement: court-supervised, 4 months, disputed claims below 15%
Arrangement proceedings: court-supervised, 12 months, disputed claims above 15%
Remedial proceedings: administrator-controlled, 12–18 months, operational restructuring needed

What are the step-by-step timelines and costs?

Timing and cost are the two variables that most often drive the wrong procedure choice. Companies under acute enforcement pressure reach for the fastest option regardless of fit. Companies reluctant to lose management control avoid remedial proceedings even when they need them. Both errors are expensive.

For arrangement approval proceedings, the process runs in four stages. First, the debtor appoints a licensed restructuring adviser and opens a restructuring day (dzień układowy). Second, the adviser prepares a creditor list and a restructuring plan. Third, voting takes place – creditors may vote in person or electronically. Fourth, the debtor files for court approval within three months of the restructuring day. Court fees are modest: the filing fee is PLN 1,000. Adviser fees vary but typically run between PLN 30,000 and PLN 80,000 for a mid-sized company.

For accelerated arrangement proceedings, the court filing triggers the procedure. The court must decide on opening within one week of filing. The court fee is PLN 1,000. Supervisor fees are regulated and depend on the size of the creditor pool – budget PLN 50,000 to PLN 150,000 for a company with 20 to 50 creditors. The arrangement must be voted on within two months of the creditor list being approved. Total elapsed time: four months in a smooth case.

Remedial proceedings carry the highest costs. The administrator's fee is calculated as a percentage of the value of assets under management. For a company with PLN 20m in assets, expect administrator fees in the range of PLN 200,000 to PLN 400,000 over the life of the proceedings. Court fees are PLN 1,000 at filing, but additional costs accumulate. The payoff is access to tools unavailable in any other procedure – including the ability to sell the business as a going concern via a pre-pack arrangement.

Cross-border debt structures add another layer. Where a Polish company has creditors in multiple EU jurisdictions, the Centre of Main Interests (COMI) rules under the EU Insolvency Regulation determine which court has jurisdiction. This is examined further in our guide to cross-border insolvency involving Poland and Luxembourg.

Which procedure fits your business scenario?

Three scenarios illustrate how the procedure choice maps to commercial reality. Each scenario involves a different business type, a different debt structure, and a different urgency level.

Scenario 1 – Manufacturing company, Silesia. A steel components manufacturer has PLN 12m in bank debt and PLN 3m owed to trade suppliers. The bank is cooperative; suppliers are not. Disputed claims represent 20 percent of total liabilities. Accelerated arrangement proceedings are unavailable because the disputed claims threshold is exceeded. Arrangement proceedings are the right choice. The 12-month timeline allows disputed claims to be adjudicated before the creditor vote. The board retains management under supervisor oversight.

Scenario 2 – IT services company, Mazowieckie. A Warsaw software firm has three creditors: a leasing company, a bank, and a single large trade creditor. All three are prepared to negotiate. Disputed claims are zero. Arrangement approval proceedings are ideal – no court involvement, a three-month timeline, and adviser fees well below PLN 100,000. The procedure does not appear in the KRS until court approval is sought, which limits reputational exposure during negotiations. (This matters particularly for IT companies whose contracts contain change-of-control or insolvency notification clauses – see our note on software copyright protection under Polish law for related contractual risks.)

Scenario 3 – Foreign investor's subsidiary, Małopolska. A German parent company holds a Polish subsidiary operating a retail network. The subsidiary has 60 creditors, significant lease liabilities, and a loss-making product line that cannot be wound down without court assistance. Remedial proceedings are the only procedure that gives the administrator power to terminate leases and employment contracts under simplified rules. The German parent must factor in that the administrator, not the board, will control the Polish entity for 12 to 18 months. We assisted a foreign investor's subsidiary in Małopolska in preparing the remedial proceedings filing in autumn 2024, resulting in the termination of eight unprofitable lease agreements within the first 90 days.

The decision matrix is straightforward once the debt structure is mapped. Cooperative creditors and no disputed claims: start with arrangement approval. Disputed claims below 15 percent: accelerated arrangement. Disputed claims above 15 percent: arrangement proceedings. Operational restructuring needed: remedial proceedings.

What are the most common mistakes – and how do you avoid them?

The single most costly mistake is delay. Polish restructuring law requires that the debtor be insolvent or threatened with insolvency to open proceedings – but the tools available narrow sharply as the financial position deteriorates. A company that enters arrangement approval proceedings while still solvent but under pressure has maximum negotiating leverage. A company that waits until enforcement actions are already underway may find that the stay comes too late to preserve key assets.

The second mistake is choosing the procedure based on cost rather than fit. Arrangement approval proceedings cost less than remedial proceedings. But a company that needs to terminate burdensome contracts cannot achieve that in arrangement proceedings. Saving PLN 200,000 in administrator fees while failing to shed PLN 2m in unprofitable leases is not a saving.

The third mistake is failing to prepare the restructuring plan before filing. Courts assess the viability of the restructuring plan as part of the opening decision. A weak plan – one that lacks detailed cash flow projections or credible assumptions – can result in the court refusing to open proceedings. That refusal is recorded in the KRS and damages the company's negotiating position with creditors. Board members should also be aware that a failed restructuring filing does not reset the 30-day insolvency filing clock. Personal liability exposure remains.

What to prepare before filing:

A full creditor list with claim amounts and dispute status
A restructuring plan with 24-month cash flow projections
Evidence of the company's viability as a going concern
A licensed restructuring adviser appointed before filing
Copies of all material contracts with insolvency or change-of-control clauses

Early engagement with a licensed adviser – before the 30-day insolvency clock starts running – is the single most effective risk-reduction measure available. The adviser can map the debt structure, identify which creditors are likely to be cooperative, and recommend the procedure that matches the company's actual position.

Specific situations require specific analysis. If your company is facing enforcement actions, has a disputed creditor pool, or is considering a cross-border restructuring, the procedure choice has consequences that cannot easily be reversed. To receive an expert assessment of your restructuring options, contact info@kordeckipartners.com.

Frequently asked questions

Q: Can a company open restructuring proceedings if it is already insolvent?

A: Yes. Polish restructuring law permits a company to file for restructuring even after the insolvency threshold has been crossed, provided the restructuring is more beneficial to creditors than bankruptcy. The board must file within 30 days of the insolvency date. Filing for restructuring within that window satisfies the filing obligation under corporate legislation and suspends personal liability exposure during the proceedings. If the court refuses to open restructuring, the board must immediately file for bankruptcy.

Q: How long does it take to reach a binding arrangement with creditors?

A: The timeline depends on the procedure. Arrangement approval proceedings can produce a binding arrangement in three to four months. Accelerated arrangement proceedings typically take four months from court filing to arrangement approval. Arrangement proceedings run approximately 12 months. Remedial proceedings take 12 to 18 months. These are realistic timelines for cooperative creditor pools – disputed claims or creditor challenges can extend each procedure by two to four months.

Q: Does opening restructuring proceedings affect the company's contracts?

A: This is a common misconception. Opening restructuring proceedings does not automatically terminate contracts. However, many commercial contracts contain insolvency or restructuring clauses that allow the counterparty to terminate on opening. The debtor's adviser should review all material contracts before filing. Under remedial proceedings, the administrator has the power to terminate burdensome contracts unilaterally – this is a tool, not a risk. In arrangement approval proceedings, the restructuring day is not publicly recorded until court approval is sought, which limits early contract termination risk.

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 pre-pack arrangements, board liability, and cross-border insolvency matters. To discuss your situation, contact info@kordeckipartners.com.