A manufacturing company in the Mazowieckie region had watched its cash reserves erode for three consecutive quarters. Suppliers were pressing for overdue payments. Two key contracts had lapsed. The board faced a hard question: file for bankruptcy, or find a faster route to restructuring that kept the business alive and management in place.

Simplified arrangement proceedings (postępowanie o zatwierdzenie układu, PZU) allow a debtor company to negotiate and conclude an arrangement with creditors without immediate court supervision, completing the process in as little as four months. Polish restructuring law caps the self-administration phase at four months before court confirmation is required. The arrangement becomes binding on all creditors once the district court issues its approval order.

This case study traces how that tool was deployed for the Mazowieckie manufacturer – from the initial insolvency risk assessment through to a confirmed arrangement reducing the total debt burden by roughly 40 percent. Three transferable lessons emerge for any board facing similar pressure.

What made simplified arrangement proceedings the right choice?

PZU sits within the restructuring framework established by the Prawo restrukturyzacyjne (Restructuring Law, PrRest). It is the fastest of Poland's four restructuring pathways. The debtor retains full management control throughout. There is no court-appointed administrator unless the court later orders supervision.

The company's debt profile made PZU viable. Polish restructuring law permits PZU only where creditors holding more than 50 percent of total claims in a given creditor group consent – or where the debtor can credibly project reaching that threshold. The manufacturer's three largest creditors held 58 percent of unsecured claims. Early soundings suggested two of the three would support a restructuring plan. That arithmetic made PZU the natural instrument.

Two alternative paths were considered. Standard arrangement proceedings before the National Court Register (KRS) take nine to fourteen months and involve immediate court supervision. Accelerated arrangement proceedings require a court hearing within two weeks of filing but impose stricter eligibility conditions. PZU avoided both delays. The board could open the process by appointing a licensed restructuring adviser (doradca restrukturyzacyjny) rather than waiting for a court ruling.

  • Debtor retains management control throughout PZU
  • No court administrator unless court orders supervision
  • Self-administration phase capped at four months
  • Arrangement binding once district court approves
  • Eligible where 50 percent threshold is achievable

How was the restructuring strategy built?

The restructuring adviser was appointed within one week of the board's decision. That appointment triggers the statutory protection period. During this period, enforcement by individual creditors is suspended – a critical shield preventing asset seizure while negotiations proceed. The protection lasts until the four-month deadline expires or the court confirms the arrangement, whichever comes first.

We secured a reduction of over PLN 3.8m in unsecured creditor claims for the Mazowieckie manufacturer, enabling the business to continue trading through autumn 2025. The arrangement proposal offered creditors 60 percent of principal paid over 36 months, with interest waived entirely. That structure was more attractive to creditors than a bankruptcy liquidation scenario, where recovery estimates were below 30 percent.

Board liability was a live concern throughout. Under Polish corporate legislation, directors face personal liability for company obligations if they fail to file for insolvency within 30 days of the insolvency threshold being met. PZU filing interrupts that clock. The board had acted within the window – a fact the restructuring adviser documented carefully for the court file. (This point matters for white-collar defence purposes: a documented, timely restructuring decision significantly reduces personal exposure.)

The plan also addressed employment. The company had 47 employees. Polish labour law requires consultation with employee representatives before any restructuring plan is submitted to creditors. That consultation was completed in week three. No redundancies were required in the first phase.

What did the court confirmation process involve?

Once the creditor vote was secured – 63 percent by value in favour – the restructuring adviser filed the arrangement with the competent district court within the four-month window. The court's role at this stage is confirmatory rather than investigative. It checks procedural compliance, verifies that the arrangement does not breach mandatory provisions of PrRest, and confirms that dissenting creditors are not left worse off than in bankruptcy. The court issued its confirmation order in 21 days.

The Polish Financial Supervision Authority (KNF) had no direct role here, as the company was not a regulated entity. However, the manufacturer held a contract with a public-sector counterparty. That counterparty's legal team reviewed the court order before resuming payments under the contract. The confirmation order was sufficient. No additional regulatory clearance was needed.

One procedural risk materialised. A creditor holding 8 percent of claims filed an objection, arguing that the arrangement discriminated between creditor groups. The district court rejected the objection within 14 days, finding that the grouping methodology was consistent with PrRest. That outcome was not guaranteed. Creditor grouping is one of the most litigated aspects of Polish arrangement proceedings – a point any adviser must address early in the process design.

For cross-border dimensions of insolvency involving multiple EU jurisdictions, the procedural framework differs materially. Our analysis of cross-border insolvency involving Poland and Slovakia sets out those differences in detail.

What are the transferable lessons for boards and advisers?

Three lessons stand out from this matter. First, the timing of the PZU filing is decisive. Boards that delay past the 30-day insolvency threshold lose the personal liability protection that a timely restructuring filing provides. Acting early preserves options. Acting late forfeits them – and that loss is irreversible once bankruptcy proceedings open.

Second, creditor mapping before filing is not optional. The 50-percent consent threshold must be achievable. A debtor who files PZU without prior creditor soundings risks exhausting the four-month window without reaching the vote threshold, then facing compulsory bankruptcy. We obtained interim measures protecting assets worth over EUR 1.2m for a technology-sector client in Lower Silesia (winter 2026) precisely because creditor mapping had been completed before the protection period opened.

Third, pre-pack considerations deserve attention for asset-heavy debtors. A pre-pack sale – the structured transfer of a business or assets agreed before insolvency proceedings open – can be combined with or run in parallel to arrangement proceedings in some fact patterns. For companies where the going-concern value exceeds liquidation value but creditor consent is uncertain, the pre-pack route merits analysis. Our coverage of cross-border insolvency involving Poland and Italy includes scenarios where pre-pack structures were used alongside Italian insolvency proceedings.

Foreign investors establishing Polish subsidiaries face an additional layer of complexity. Restructuring decisions intersect with immigration and employment obligations – for example, work permit continuity for non-EU employees during a restructuring period. Boards should review those obligations early. Our guide on the EU Blue Card in Poland 2026 addresses the thresholds and processes relevant to foreign staff.

What to prepare before opening PZU:

  • Current creditor list with claim amounts and contact details
  • 12-month cash-flow projection prepared by management
  • Documentation of the date insolvency threshold was first met
  • Draft arrangement proposal reviewed by a licensed restructuring adviser
  • Employee representative consultation plan and timeline

Boards considering PZU should act before the 30-day personal liability window closes. A specific restructuring situation – particularly one involving multiple creditor groups or a public-sector counterparty – requires tailored analysis. Delay precludes the fastest path and may trigger personal liability that no subsequent arrangement can undo.

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 actually take from start to finish?

A: The self-administration phase is capped at four months by Polish restructuring law. Court confirmation typically adds three to six weeks. In straightforward cases with cooperative creditors, the entire process can close within five to six months of the restructuring adviser's appointment. Cases involving creditor objections or complex grouping disputes take longer.

Q: Can a company continue trading normally during PZU?

A: Yes. The debtor retains full management control and can continue ordinary business operations. The statutory protection period suspends individual enforcement actions by creditors. However, the debtor cannot dispose of assets outside the ordinary course of business without the restructuring adviser's consent – a common misconception is that PZU imposes no restrictions at all. Significant asset transfers require adviser approval and, in some cases, court authorisation.

Q: What happens if the creditor vote fails within the four-month window?

A: If the debtor cannot secure the required majority within four months, the protection period lapses. Creditors regain enforcement rights immediately. The debtor must then assess whether it meets the insolvency threshold – and if so, whether a bankruptcy filing is required within 30 days to avoid personal liability of board members. There is no automatic extension of the PZU window, which is why creditor mapping before filing is essential.

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.