Case No.: KR1S/GRz/141/2023
MB/LAW is pleased to announce the successful completion of restructuring proceedings for a clothing retailer operating a store in a shopping mall. The court confirmed the arrangement (composition) with creditors, securing the company’s continued operations.
The business had been active since 2014, focusing on clothing retail through brick-and-mortar stores. In 2020, in response to pandemic-related challenges, the debtor expanded into the sale of used cars.
Reasons for financial difficulties:
The company faced severe hardship due to:
- the COVID-19 pandemic (closure of shopping malls, restricted customer access, sharp revenue decline),
- permanent shifts in consumer behavior (customers remained online while the debtor operated only in physical stores),
- an unsuccessful investment in a third store (closed after one year with losses),
- a sharp increase in interest rates (loan installments up by 50%),
- rising costs of premises (energy costs up by approx. 400%),
- reduced consumer purchasing power, and
- additional tax burdens under the “Polish Deal” (higher social security and tax liabilities).
As a result, the entrepreneur was forced to temporarily close one of the three stores.
Restructuring outcome:
Thanks to the work of the arrangement supervisor – attorney-at-law Michał Burek, LL.M., licensed restructuring advisor no. 1665 – and the support team, MB/LAW reached a negotiated settlement with creditors. The arrangement was voted upon and confirmed by the court on 28 May 2024.
- Public law creditor (Social Security Authority – ZUS): repayment in 24 equal monthly instalments, with the first instalment deferred by 3 months.
- Private creditors: full waiver of interest, court fees, and enforcement costs – repayment of 100% of the principal in 36 monthly instalments.
- Bank claims above PLN 150,000: repayment in 96 monthly instalments with fixed interest at 3% per annum.
- Bank claims up to PLN 150,000: repayment in 105 monthly instalments at 10% annual interest (covering principal, fees, costs, commissions, and accrued interest).
If your company is struggling with debt or liquidity issues, MB/LAW can help you regain stability. We negotiate with creditors, design realistic restructuring plans, and guide you through the entire process until the arrangement is confirmed by the court. Our latest case in the retail sector proves that even in the face of serious financial pressure, it is possible to reach a legally binding agreement with creditors and continue operating.
