Cross-border insolvency involving Poland and United States

A Delaware-incorporated holding company discovers that its Polish operating subsidiary has been insolvent for several months. The subsidiary's management board never filed for insolvency. Trade creditors are threatening enforcement in Warsaw. The US parent's restructuring counsel has never dealt with Polish proceedings. That scenario – increasingly common as transatlantic business ties deepen – requires coordinated action in two jurisdictions simultaneously, under fundamentally different legal frameworks.

Cross-border insolvency between Poland and the United States is governed by two parallel regimes that rarely speak to each other automatically. Poland applies the Prawo restrukturyzacyjne (Restructuring Law) and the Prawo upadłościowe (Insolvency Law), both of which incorporate the UNCITRAL Model Law on Cross-Border Insolvency. The United States applies Chapter 15 of the Bankruptcy Code, which also derives from the UNCITRAL Model Law. Despite that shared origin, recognition, asset protection, and creditor priority diverge sharply in practice.

This page sets out the main procedural instruments, the critical deadlines that trigger personal liability, the practical traps that catch foreign groups off guard, and the coordination steps that protect value on both sides of the Atlantic. Each section opens with the direct answer, then adds the operational detail that boards and their advisers need before a crisis hits.

What legal framework governs cross-border insolvency between Poland and the United States?

Both countries have adopted the UNCITRAL Model Law, but their implementing statutes differ in scope and in the courts that apply them. Polish insolvency law designates the district court with jurisdiction over the debtor's registered office as the competent tribunal – in practice, the District Court in Warsaw (Sąd Rejonowy dla m.st. Warszawy) handles the largest cross-border cases. The US Bankruptcy Court for the relevant district handles Chapter 15 petitions. Neither country is an EU member state in the US context, so the EU Insolvency Regulation does not apply to the transatlantic dimension.

The key threshold concept in both systems is the Centre of Main Interests (COMI). Where a company's COMI is located determines which country's proceedings are "main" and which are "non-main." For a Polish subsidiary of a US parent, the COMI is presumed to be at the registered office in Poland – unless the US parent can demonstrate that management decisions are actually made in the United States. That rebuttal is harder than most boards expect. Polish courts have applied the presumption strictly, and the National Court Register (Krajowy Rejestr Sądowy, KRS) registration address carries substantial weight.

Two additional institutions matter at the outset. The Polish Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF) becomes relevant where the insolvent entity holds a financial licence. The Polish Social Insurance Institution (Zakład Ubezpieczeń Społecznych, ZUS) is a privileged creditor in any Polish proceeding and files claims independently. Both agencies must be notified promptly once proceedings open.

• COMI determines which country's proceedings are "main."
• The KRS registration address creates a strong Polish COMI presumption.
• Chapter 15 recognition in the US does not automatically stay Polish enforcement.
• ZUS and KNF have independent standing in Polish insolvency proceedings.
• Parallel filings in both jurisdictions are sometimes unavoidable.

One point that US counsel consistently underestimates: Polish insolvency law imposes a 30-day filing deadline from the moment a company becomes insolvent. Missing that window triggers personal liability of board members (members of the zarząd) for unsatisfied creditor claims. That liability is not discharged by a later filing. It is irreversible from the moment the deadline passes.

How does Chapter 15 recognition affect Polish assets and proceedings?

Chapter 15 recognition – granted by a US Bankruptcy Court on petition by a foreign representative – produces two distinct effects depending on whether recognition is as a "foreign main proceeding" or a "foreign non-main proceeding." Recognition as a main proceeding triggers an automatic stay of US enforcement actions against the debtor's US assets. Recognition as a non-main proceeding produces only discretionary relief. For a group with a Polish main proceeding and US assets, the foreign representative appointed by the Polish court seeks Chapter 15 recognition in the United States within the same 30-to-60-day window that Polish procedural steps are also running.

The practical effect is significant. A US creditor holding a judgment against the Polish entity cannot enforce against US-sited assets once the automatic stay applies. That buys the Polish administrator or restructuring supervisor time to implement a plan. However, the stay does not reach Polish assets – those remain subject to Polish court supervision. Any attempt by a US creditor to enforce in Poland requires a separate Polish exequatur or enforcement proceeding, which takes months.

We secured interim measures protecting assets worth over EUR 5m for a German investor's subsidiary in Lower Silesia (spring 2025). That experience illustrates how quickly a well-prepared foreign representative can obtain protective relief before enforcement crystallises on either side of the Atlantic.

One structural trap: the "foreign representative" concept under Chapter 15 must map onto an actual role recognised under Polish law. A Polish court-appointed administrator (zarządca) qualifies. A Polish restructuring supervisor (nadzorca sądowy) also qualifies in most US courts' reading, though the scope of authority differs. A board member acting informally does not qualify. US counsel must verify the exact Polish appointment order before filing the Chapter 15 petition – a mismatch causes the petition to be dismissed, wasting weeks and exposing assets to enforcement.

For a tailored strategy on Chapter 15 recognition and parallel Polish proceedings, reach out to info@kordeckipartners.com.

Timing is the dominant variable. The Chapter 15 petition must be filed before US creditors obtain judgment liens or levy on US assets. Once a lien attaches, the automatic stay does not dissolve it retroactively. That forfeits the protection that Chapter 15 was designed to provide – an irreversible loss of leverage in any subsequent restructuring negotiation.

What are the main Polish restructuring instruments available to a US-connected debtor?

Polish restructuring law offers four distinct procedures, each with a different creditor threshold, court involvement level, and timeline. Selecting the wrong instrument – or entering a procedure too late – precludes a pre-pack sale and forces a liquidation that destroys going-concern value. The four instruments are: arrangement approval proceedings (postępowanie o zatwierdzenie układu, PZU); accelerated arrangement proceedings (przyspieszone postępowanie układowe, PPU); arrangement proceedings (postępowanie układowe, PU); and remedial proceedings (postępowanie sanacyjne).

For a US-connected debtor, the PZU is the most flexible entry point. It requires no court order to open, runs for up to four months, and allows the debtor to negotiate with creditors while retaining management control. However, it only works where disputed claims do not exceed 15% of total liabilities. Where that threshold is exceeded – common in groups with US parent guarantees and inter-company loans – PPU or PU is required, and those procedures require court appointment of a supervisor within two to three weeks of filing.

Remedial proceedings (postępowanie sanacyjne) are the most powerful instrument. They allow the debtor to terminate burdensome contracts, reduce headcount beyond normal employment law limits, and sell assets free of encumbrances. That last feature is the Polish equivalent of a Section 363 sale under the US Bankruptcy Code. Where a US buyer is acquiring the Polish business, a coordinated sanacja plus Section 363 structure can deliver a clean title transfer on both sides simultaneously – but only if the Polish court's sale order is obtained before the US closing.

A pre-pack (przygotowana likwidacja, pre-pack) is available in Polish insolvency proceedings as well. The buyer and price are agreed before the insolvency petition is filed. The court approves the sale within weeks of opening. For a US private equity buyer acquiring a distressed Polish target, this is often the fastest route to certainty. The pre-pack sale price must meet a court-appointed valuer's minimum – typically within 10% of appraised value – and the sale must be approved at the first creditors' meeting.

• PZU: no court order needed; 15% disputed-claims cap; four-month maximum.
• PPU/PU: court supervisor appointed within two to three weeks.
• Sanacja: contract termination, headcount reduction, free-of-encumbrance sale.
• Pre-pack: buyer agreed pre-filing; court approval within weeks of opening.

What pitfalls do US groups most often encounter in Polish insolvency proceedings?

Three failure modes appear repeatedly in transatlantic insolvency cases. First, the US parent treats the Polish subsidiary's distress as a local matter and delays engaging Polish counsel until enforcement has already started. By that point, the 30-day filing deadline has usually passed, board liability has crystallised, and the best restructuring options are closed. Personal liability of board members under Polish corporate legislation is joint and several, unlimited in amount, and extends to former directors who were on the board during the insolvency period – even if they resigned before the filing.

Second, US counsel files a Chapter 15 petition based on an incorrect characterisation of the Polish proceedings. If the Polish proceeding is a restructuring (not an insolvency), some US courts have questioned whether it qualifies as a "foreign proceeding" under the Bankruptcy Code. That question has not been fully resolved by US appellate courts. Filing on the wrong characterisation risks dismissal and the loss of the automatic stay – which forfeits the asset protection that triggered the US filing in the first place.

Third, inter-company claims are mishandled. A US parent that has made loans to the Polish subsidiary is a creditor in the Polish proceeding. But that claim is subordinated under Polish insolvency law if the parent holds more than 10% of the subsidiary's shares. The subordination applies automatically – it does not require a court challenge. US groups that model their recovery assuming pari passu treatment with external creditors routinely discover that their inter-company claim recovers last, or nothing.

We obtained a reversal of an administrator's subordination decision for a manufacturing client in the Mazowieckie region (autumn 2024), recovering over PLN 3.5m in inter-company claim value. The key was challenging the administrator's calculation of the shareholding threshold at the relevant date – a technical point that most US-side advisers miss entirely.

White-collar defence exposure adds a further dimension. Polish criminal law imposes liability on board members who knowingly continue trading while insolvent, conceal assets from the administrator, or prefer certain creditors. Those offences carry custodial sentences of up to eight years. Where a US parent directed the subsidiary's management to make payments to the parent during the insolvency period, both the board members and the parent's officers may face criminal exposure in Poland.

To receive an expert assessment of board liability and white-collar defence exposure in your cross-border situation, contact info@kordeckipartners.com.

How should a US group coordinate a parallel restructuring strategy across both jurisdictions?

Effective coordination requires a single point of command that has authority in both jurisdictions. In practice, that means a joint engagement between Polish insolvency counsel and US Chapter 15 counsel, with a shared information protocol from day one. The Polish administrator or restructuring supervisor holds statutory authority over the Polish estate – US counsel cannot override that authority, but can shape the timing of US filings to maximise the Polish procedure's effectiveness.

The coordination timeline typically runs as follows. In the first two weeks, Polish counsel assesses COMI, identifies the correct Polish instrument, and advises whether the 30-day filing deadline has already passed. In weeks three to four, the Polish petition is filed and the administrator or supervisor is appointed. In weeks four to six, the Chapter 15 petition is filed in the appropriate US district, with the Polish appointment order as the primary exhibit. US asset protection through the automatic stay takes effect upon recognition, typically within 30 to 45 days of the Chapter 15 filing.

Cross-border insolvency cases involving Poland and Ukraine follow a broadly similar UNCITRAL Model Law framework, though with important differences in recognition practice – our analysis at cross-border insolvency involving Poland and Ukraine sets out those distinctions in detail. US groups with subsidiaries in multiple jurisdictions should also review our guidance on cross-border insolvency involving Poland and Italy, where EU Regulation No 2015/848 creates a different recognition architecture for the European dimension of the same group.

For US subsidiaries operating in Poland, compliance programme design is a related priority – particularly where the subsidiary's distress stems from regulatory or contractual breaches. Our note on compliance programme design for United States subsidiaries in Poland addresses the preventive measures that reduce insolvency risk in the first place.

Decision matrix for instrument selection: where the debtor retains management control and disputed claims are below 15%, start with PZU. Where disputed claims exceed 15% or creditor hostility is high, move directly to PPU or sanacja. Where a US buyer is identified, layer a pre-pack onto the sanacja petition. Where Chapter 15 recognition is needed, file immediately after the Polish petition – not after the Polish court issues its first substantive order, by which point US enforcement may have already started.

What self-assessment checklist should a US group apply before a Polish insolvency crisis?

Early self-assessment is the single most effective tool for preserving options. Once a Polish subsidiary meets the legal definition of insolvency – either the balance-sheet test (liabilities exceed assets) or the liquidity test (debts unpaid for more than three months) – the 30-day clock starts. Most US groups do not monitor their Polish subsidiaries against those tests in real time. By the time Warsaw-based management raises the alarm, the deadline is often days away, not weeks.

The restructuring Poland practice at KORDECKI & Partners applies the following checklist in the first advisory call with a US client:

• Has the Polish subsidiary missed any payment obligations for more than 30 days? If yes, the insolvency presumption may already apply.
• Do current liabilities exceed current assets on the most recent balance sheet? If yes, the balance-sheet test is triggered.
• Has the management board documented its assessment of the subsidiary's financial condition in board minutes? Absence of documentation increases personal liability exposure.
• Are there inter-company loans from the US parent? If yes, assess subordination risk before filing.
• Has any creditor obtained a court order or enforcement title against the Polish subsidiary in the past 90 days?

A "yes" answer to any of the first two questions requires immediate legal assessment – not a management meeting scheduled for next month. The insolvency window in Poland is unforgiving. A board that waits for the quarterly management report to confirm distress will typically find that the 30-day deadline has already expired. That precludes the safe-harbour defence against personal liability. It also forfeits the ability to open PZU proceedings, which require the debtor to be solvent at the point of filing.

Three business scenarios illustrate the stakes. A Warsaw-based manufacturing company with a US private equity parent can use a pre-pack sanacja to sell the operating business to a trade buyer within 60 days, protecting jobs and recovering secured creditor value – but only if the petition is filed before enforcement starts. A Polish IT services company with a US venture capital investor faces a different challenge: its main assets are contracts and software licences, which terminate on insolvency unless the administrator elects to continue them within 14 days of opening. A foreign investor entering Poland through a newly acquired subsidiary must assess whether any pre-acquisition liabilities trigger the insolvency tests immediately on closing.

Frequently asked questions

Q: How long does it take to obtain Chapter 15 recognition of a Polish insolvency proceeding in the United States?

A: Most US Bankruptcy Courts grant Chapter 15 recognition within 20 to 45 days of the petition filing, provided the petition is accompanied by a certified copy of the Polish court's appointment order and a statement identifying the foreign representative. Contested recognition hearings – where a US creditor challenges COMI – can extend the timeline to three to six months. Filing promptly after the Polish proceeding opens is the most effective way to avoid that delay.

Q: Can a Polish board member be personally liable even if the US parent directed the decisions that caused the insolvency?

A: Yes. Under Polish corporate legislation, personal liability of board members for unsatisfied creditor claims attaches to the individuals who held the position during the period when the filing obligation arose – regardless of who gave the instructions. The board member's recourse is a separate indemnity claim against the parent, which is a contractual matter and provides no defence against creditor claims. This is one of the most common misconceptions among US-side advisers: the parent's direction does not transfer liability away from the Polish board.

Q: What does a Polish restructuring proceeding cost, and who pays?

A: Court fees for opening restructuring proceedings range from PLN 1,000 to PLN 6,000 depending on the procedure. The restructuring supervisor's or administrator's remuneration is set by the court and typically ranges from PLN 50,000 to several hundred thousand PLN for a mid-size case, paid from the estate. Legal advisory fees for coordinated Polish and US proceedings in a mid-complexity case typically range from EUR 80,000 to EUR 250,000 in total, split between Polish and US counsel. US groups should budget for both jurisdictions from the outset – treating the Polish advisory as the only cost centre is a planning error that causes US-side gaps at the worst possible moment.

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 cross-border insolvency, restructuring, and white-collar defence. We work with Polish entrepreneurs, foreign investors, and in-house legal teams navigating distress across multiple jurisdictions simultaneously. 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.