A Małopolska-based logistics company faced a liquidity crisis in late 2024. Supplier claims had accumulated over six months. Two creditors were preparing enforcement actions that would have frozen the company's bank accounts within days. The board had fewer than two weeks to act before the situation became irreversible.

Simplified arrangement proceedings (postępowanie o zatwierdzenie układu, PSU) allow a Polish debtor to propose a binding arrangement to creditors without immediate court supervision, completing the entire process in as little as four months. The debtor appoints a licensed restructuring adviser (doradca restrukturyzacyjny) on day one, which triggers an automatic stay against individual enforcement. The National Court Register (KRS) and the National Restructuring Register (Krajowy Rejestr Zadłużonych, KRZ) record the opening of proceedings, giving the arrangement legal effect against all creditors.

This case study traces the strategy our team deployed, the procedural steps taken, and the lessons that transfer to other distressed Polish businesses. The article covers four stages: background and diagnosis, strategy selection, the arrangement process itself, and key takeaways for boards and advisers.

What made simplified arrangement proceedings the right choice?

The logistics company's debt-to-asset ratio was uncomfortable but not terminal. Total liabilities stood at roughly PLN 4.2m, of which PLN 2.8m were trade creditors. The remaining balance covered a leasing portfolio and a single bank facility. Crucially, the company still generated positive operating cash flow – the crisis was structural, not existential. That distinction mattered enormously for strategy.

Polish restructuring law offers four main pathways. Full restructuring proceedings and sanation proceedings carry heavier court involvement and longer timelines. Arrangement approval proceedings require prior creditor negotiations. PSU sits apart: the debtor controls the timetable, the court intervenes only at the approval stage, and the automatic stay activates within days of appointing the adviser. For a company with a functioning business and an identifiable creditor group, PSU is the fastest instrument available.

The board's personal exposure was the second driver of the choice. Under Polish insolvency law, directors who fail to file for insolvency within 30 days of the insolvency trigger face personal liability for the company's unsatisfied obligations – a consequence that is genuinely irreversible once creditors obtain judgments. Opening PSU suspends that clock. It also provided a defence in the event any creditor later challenged the timing of the filing. The Polish Financial Supervision Authority (KNF) was not involved here, but the KRZ filing created a public record that protected the board from later allegations of inaction.

  • Positive operating cash flow confirmed the business was viable
  • Trade creditor concentration – three creditors held 68% of the debt
  • No pending criminal proceedings that would complicate white-collar defence exposure
  • Enforcement freeze was achievable within 72 hours of adviser appointment

How did the arrangement process unfold in practice?

Day one: the restructuring adviser was appointed and the KRZ entry was filed. The automatic stay took effect immediately, halting both enforcement actions. The adviser prepared the preliminary debt inventory within seven days – a statutory requirement under Polish restructuring legislation. The company's management delivered full financial disclosure in parallel, which compressed the adviser's timeline considerably.

We secured a stay of enforcement protecting assets worth over PLN 4m for this Małopolska client in winter 2024, preventing account freezes that would have shut down operations within the week. That outcome was only possible because the adviser appointment preceded the creditors' court motions by 48 hours. Timing, in PSU, is everything.

The arrangement proposal was drafted over weeks two through five. The core terms offered trade creditors a 35% haircut with repayment over 24 months, while the bank facility was restructured separately through a parallel amendment. The leasing portfolio was excluded from the arrangement – leasing creditors retain enforcement rights unless they vote in favour. This is a common misconception: PSU does not automatically bind secured creditors or lessors.

Creditor voting ran for four weeks via the KRZ platform. The three largest trade creditors, who collectively held the qualifying majority, voted in favour. Court approval followed within six weeks of the vote closing – the District Court (Sąd Rejonowy) in Kraków confirmed the arrangement without a hearing, which is standard where no creditor objects. Total elapsed time from adviser appointment to court approval: approximately 14 weeks.

What lessons does this case transfer to other distressed businesses?

The single most transferable lesson is early intervention. PSU's automatic stay is powerful, but it requires the debtor to act while the business still has operating cash flow. A company that waits until accounts are frozen has already lost the instrument. The 30-day insolvency filing deadline under Polish insolvency law is not a safety net – it is the outer boundary of a much earlier decision window.

Our team also obtained interim relief for a manufacturing client in the Silesia region (spring 2025), where delayed adviser appointment had allowed one creditor to obtain a court order. Reversing that order cost the client four additional weeks and significant legal fees. The contrast with the Małopolska case is instructive: early appointment eliminated that risk entirely.

For foreign investors and cross-border structures, PSU has additional relevance. Where a Polish subsidiary sits within a multinational group, the automatic stay under Polish proceedings may interact with insolvency proceedings in other jurisdictions. Boards of foreign parent companies should understand how Polish restructuring law coordinates with EU Regulation 2015/848 on insolvency proceedings. For Franco-Polish structures, the interaction is explored in detail at cross-border insolvency involving Poland and France. Swiss-Polish holding structures raise distinct questions addressed at cross-border insolvency involving Poland and Switzerland.

A final structural point: PSU does not resolve underlying governance or ownership issues. Where a distressed company also needs to restructure its shareholding or introduce new capital, a family foundation or holding restructuring may run in parallel. The tax dimensions of that layer are covered separately at family foundation in Poland – tax advantages and setup.

What should boards prepare before opening proceedings?

Preparation quality determines outcome speed. Courts and advisers work faster when the debtor delivers clean, complete documentation at the outset. Boards that arrive with disorganised creditor lists or incomplete financial records add weeks to the process – and weeks matter when enforcement is imminent.

The checklist below reflects what the Małopolska client prepared before the adviser appointment. Each item directly affected the timeline.

  • Full creditor register with claim amounts, due dates, and enforcement status
  • Three years of audited or reviewed financial statements
  • Current cash-flow forecast covering at least 12 months
  • Inventory of secured assets and existing encumbrances
  • Board resolution authorising the restructuring adviser appointment

Boards should also assess personal liability exposure before opening proceedings. If the 30-day insolvency filing window has already passed, PSU may not fully extinguish board liability – a legal opinion from restructuring counsel is essential before any public filing. Pre-pack arrangements (pre-pack) are an alternative where asset transfer is the preferred outcome, but that instrument has a longer court timeline and different creditor dynamics.

The specific facts of your company's situation will determine which instrument applies and how quickly it can be executed. Waiting for the situation to stabilise on its own forfeits the automatic stay and accelerates the board's personal exposure.

To receive an expert assessment of your restructuring options under Polish law, contact info@kordeckipartners.com.

Frequently asked questions

Q: How long does simplified arrangement proceedings take from start to court approval?

A: In straightforward cases with cooperative creditors, the process runs between 12 and 20 weeks. The Małopolska case described here closed in approximately 14 weeks. Cases with disputed claims or creditor objections routinely take longer – the court approval stage alone can extend by several weeks if a creditor files a formal objection with the District Court.

Q: Does the automatic stay in PSU stop all enforcement actions?

A: A common misconception is that the stay is universal. Under Polish restructuring legislation, the automatic stay covers unsecured creditors and most trade claims. Secured creditors and lessors retain enforcement rights unless they vote in favour of the arrangement or the court issues a specific protective order. Boards should not assume that leasing creditors or mortgage holders are automatically bound.

Q: What happens if the arrangement vote fails?

A: If the required majority is not achieved – under Polish restructuring law, creditors holding more than half the total debt must vote in favour – the proceedings close without an arrangement. The automatic stay lapses immediately. The debtor then faces the original enforcement actions plus the obligation to assess whether insolvency filing is required within 30 days. Early creditor engagement is therefore not optional; it is the mechanism that determines whether PSU succeeds.

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.