A Kraków-based distribution company faces mounting supplier claims, a blocked credit line, and a board that has not slept properly in weeks. The managing director knows insolvency is approaching but believes formal bankruptcy will destroy relationships built over fifteen years. There is a faster, less destructive alternative – and Polish restructuring law created it precisely for this situation.
Simplified arrangement proceedings (postępowanie o zatwierdzenie układu, PZU) allow a Polish debtor to propose and vote on a debt-restructuring arrangement with creditors outside court supervision, completing the entire process in as little as four months. The debtor retains full management of the company throughout. Court involvement is limited to approving the final arrangement, which then becomes binding on all creditors in the relevant class – including dissenters.
This guide walks through the procedure step by step: how to qualify, how to appoint a licensed restructuring adviser, how the creditor vote works, what the arrangement can contain, and where companies typically lose time or lose creditor support. Three business scenarios illustrate how the same mechanism operates differently for a manufacturer, an IT services provider, and a foreign-owned subsidiary. A checklist and FAQ close the guide.
What is simplified arrangement proceedings and who qualifies?
PZU is the lightest procedural variant in Polish restructuring law. It sits outside the court system during the arrangement phase. The debtor files only once – at the end – asking the district court to approve an arrangement that creditors have already voted on. This design cuts months from a conventional restructuring timetable.
Polish restructuring legislation sets one core eligibility threshold: the claims of creditors who dispute their debts must not exceed fifteen percent of total claims. If disputed claims exceed that share, the debtor must switch to a more supervised procedure – either arrangement approval proceedings or, in serious cases, sanation proceedings. The fifteen-percent rule is assessed at the moment the debtor decides to open PZU, so it pays to map the creditor pool early.
Who actually uses PZU? The typical candidate is a company that is insolvent or threatened with insolvency, still has viable operations, and needs to cut the nominal value of its debts or extend repayment schedules. Board members facing personal liability exposure under Polish corporate legislation find PZU attractive precisely because opening the proceedings suspends enforcement against the debtor's assets for up to four months – a window that often forecloses creditor attempts to attach accounts or seize inventory.
The National Court Register (KRS) records the opening of PZU. The debtor is also listed in the National Restructuring Register (Krajowy Rejestr Zadłużonych, KRZ), which is publicly searchable. Transparency is the price of protection.
How does the step-by-step process work?
The procedure has five stages. Each has a fixed function and a practical risk point. Understanding both prevents the delays that kill otherwise sound restructurings.
Stage 1 – Appoint a licensed restructuring adviser. The debtor selects a licensed restructuring adviser (doradca restrukturyzacyjny) who acts as arrangement supervisor (nadzorca układu). This is not optional. The adviser must hold a licence issued by the Minister of Justice. Their role is to prepare the creditor list, assist in drafting the arrangement proposal, and supervise the vote. Fees are negotiated privately and typically range from PLN 20,000 to PLN 80,000 for a mid-size case, depending on complexity and the number of creditors.
Stage 2 – Prepare the arrangement proposal and creditor list. The debtor, with adviser support, prepares a restructuring plan and a formal arrangement proposal. The plan explains why the business is viable and how the proposed debt reduction or rescheduling will restore solvency. The creditor list must be accurate. Omitting a creditor does not exclude them from the arrangement's effect – it creates a challenge ground later.
Stage 3 – Collect votes. Creditors vote in writing or electronically. The voting period cannot exceed three months from the day the adviser publishes the arrangement proposal in KRZ. A majority in number and a two-thirds majority by value of claims in each voting group must approve the proposal. If both thresholds are met, the arrangement passes – even if some creditors voted against.
Stage 4 – File for court approval. Within three months of the vote closing, the debtor files for arrangement approval with the competent district court. The court reviews procedural compliance, not commercial merit. Approval typically takes four to eight weeks.
Stage 5 – Execution. Once approved, the arrangement is executed under the adviser's supervision. Creditors who receive payment under the arrangement release their original claims. Non-compliance triggers termination proceedings, which can reopen enforcement.
What can the arrangement actually contain?
Arrangement content is where the real negotiation happens. Polish restructuring law gives debtors significant flexibility. An arrangement can reduce the nominal value of claims, extend repayment periods, convert debt to equity, or combine all three. There is no statutory cap on the haircut a debtor can propose – but creditors vote, so commercial realism governs.
We secured a reversal of an enforcement measure protecting assets worth over PLN 4m for a manufacturing client in the Mazowieckie region (autumn 2025). The arrangement in that case reduced unsecured claims by forty percent and extended repayment of the remainder over thirty-six months. Creditors approved because the alternative – formal bankruptcy – would have yielded them less than twenty cents on the zloty.
Secured creditors occupy a separate voting group. They vote on arrangement terms that affect their security. An arrangement can modify secured claims only if the secured creditor votes in favour, or if the court applies the cross-class cram-down mechanism available under Polish restructuring law. That mechanism is rarely invoked in PZU because the procedure is designed for consensual outcomes.
Public-law claims – tax arrears, social security contributions owed to the Social Insurance Institution (Zakład Ubezpieczeń Społecznych, ZUS) – are restructured differently. They require separate regulatory consent. Tax restructuring requires approval from the Head of the relevant Tax Office. Failing to coordinate this track in parallel with the creditor vote is a common and expensive mistake.
A practical checklist of what to prepare before opening PZU:
- Full creditor schedule with claim amounts and dispute status
- Three-year financial projections demonstrating post-arrangement viability
- Draft arrangement proposal reviewed by the appointed adviser
- Evidence of ZUS and tax-authority engagement on public-law claims
- Board resolution authorising the restructuring adviser appointment
How do the three business scenarios play out?
PZU works differently depending on the debtor's sector, creditor base, and ownership structure. Three scenarios illustrate the range.
Manufacturing company. A mid-size manufacturer in Silesia has PLN 12m in trade payables spread across forty suppliers. No creditor holds more than twelve percent of total claims. Disputed claims are below the fifteen-percent threshold. The company opens PZU, appoints an adviser, and votes within ten weeks. The arrangement reduces trade payables by thirty percent and reschedules the remainder over two years. Enforcement is suspended the moment the adviser publishes the opening notice in KRZ – protecting machinery and stock from attachment.
IT services provider. A Warsaw-based IT company has three major clients who have withheld payments following a contractual dispute. Those withheld amounts push disputed claims above fifteen percent. PZU is unavailable until the dispute is resolved or partially settled. The company must first negotiate a partial settlement – reducing the disputed portion below the threshold – before opening. This is a pre-PZU negotiation step that many boards overlook. Missing it forfeits the speed advantage entirely.
Foreign-owned subsidiary. A German investor's Polish subsidiary has guaranteed obligations to the parent company and third-party bank debt. The parent is also a creditor. Related-party claims are placed in a separate voting group under Polish restructuring rules. The parent cannot dominate the vote to the detriment of independent creditors. The adviser must map group relationships carefully. For context on how cross-border restructuring strategy interacts with Polish proceedings, see our restructuring practice overview.
We assisted a technology-sector client in Małopolska (spring 2026) in mapping related-party creditor groups before opening PZU. Proper classification avoided a court challenge that would have delayed approval by at least three months.
What are the most common mistakes – and how do they cost you?
PZU fails most often not because the business is unviable but because procedural errors destroy creditor trust or close the legal window. Four mistakes account for the majority of failed proceedings.
Underestimating the disputed-claims threshold. A debtor that opens PZU without auditing dispute status risks a court refusal to approve the arrangement. The four-month protection window expires. Enforcement resumes. The board loses the restructuring option and may face personal liability under Polish corporate legislation for failing to file for bankruptcy in time. That consequence is irreversible.
Presenting unrealistic financial projections. Creditors vote on commercial merit. A projection that assumes revenue growth of thirty percent per year when the sector is contracting will lose the vote. The arrangement fails. The company re-enters distress with a weakened negotiating position and creditors who are now hostile.
Ignoring public-law creditors. ZUS and the tax authorities do not vote in the standard creditor assembly. Their consent is obtained separately. A debtor who secures a creditor vote majority but fails to obtain ZUS consent cannot implement the arrangement on the public-law portion. This blocks execution and can trigger termination. Directors facing this scenario should also review their exposure under the framework discussed in our article on D&O insurance coverage for Polish directors.
Delaying the court filing. The debtor has three months from the vote to file for approval. Missing that deadline voids the vote result. The entire process must restart. Courts do not extend this deadline. There is no discretion.
For companies operating in regulated sectors, procedural compliance intersects with broader risk frameworks. Regulated entities – particularly those subject to digital operational resilience requirements – should consider how restructuring proceedings interact with their regulatory obligations, a question addressed in our analysis of DORA and ICT risk management for Polish entities.
The restructuring window is finite. A company that delays opening PZU while hoping the situation will improve typically finds that, three months later, a creditor has obtained a court enforcement order that makes the fifteen-percent disputed-claims threshold impossible to meet. That single enforcement action can foreclose the simplified path permanently.
Frequently asked questions
Q: How long does simplified arrangement proceedings actually take from start to finish?
A: The statutory framework allows the full process – from opening to court approval – to be completed in approximately four months. In practice, well-prepared cases with a cooperative creditor base close in five to six months. Contested cases, or those involving complex public-law creditor negotiations, may take eight to ten months. The three-month voting period and three-month court-filing window are the two hard deadlines that govern the timetable.
Q: Can a company continue trading and paying employees during PZU?
A: Yes. This is one of the most important features of PZU. The debtor retains full management authority throughout the proceedings. The arrangement supervisor does not replace management – they oversee the process. Employees are paid normally. Trade continues. The enforcement suspension protects assets without freezing operations. This is a common misconception: many boards assume restructuring means handing control to an external administrator. In PZU, that does not happen unless the court later converts the proceedings.
Q: What does PZU cost, and who pays the restructuring adviser?
A: The debtor pays the adviser's fee, which is agreed privately before the proceedings open. For a company with twenty to fifty creditors and total claims in the PLN 5m to PLN 20m range, adviser fees typically fall between PLN 25,000 and PLN 70,000. Court fees for the approval application are modest – generally below PLN 2,000. The larger cost is management time: preparing accurate creditor schedules and credible financial projections requires significant internal effort, typically two to four weeks of focused work before the adviser can file the opening notice.
Every restructuring situation carries specific facts that change the legal analysis. A delay of even a few weeks can close the simplified path and force a more expensive, more supervised procedure – or worse, push the company into formal bankruptcy where board liability risk increases sharply.
To receive an expert assessment of your company's restructuring options under Polish law, contact info@kordeckipartners.com.
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. 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.