Case No.: PO1P/GRz/201/2024
MB/LAW is pleased to announce the successful completion of arrangement approval proceedings for an entrepreneur in the construction industry, operating as a partner in a civil partnership providing comprehensive general construction services and, additionally, running a car wash.
The entrepreneur had been conducting business since 2013 as a partner of a civil partnership based in Lubstów. The company provided general construction services, mainly for businesses operating in the Netherlands, which engaged the partnership as a subcontractor for building works.
The company’s revenues in 2023 amounted to approximately PLN 6,204,426, and in the period January–May 2024 approximately PLN 3,158,973. The partnership employed 25 people (monthly wage costs approx. PLN 200,000).
Causes of Financial Difficulties
The financial distress resulted from several external and internal factors:
- COVID-19 pandemic restrictions, significantly reducing investment in the construction sector and decreasing the number of available contracts.
- War in Ukraine, causing a substantial increase in construction material prices across Europe and a decline in construction projects.
- Rising employment costs and general operational expenses, forcing staff reductions and limiting the company’s capability to handle larger numbers of contracts.
- Sharp interest rate increases introduced by the National Bank of Poland, significantly increasing loan and credit instalments.
- Tax changes under the “Polish Deal”, drastically altering health insurance contribution rules and increasing liabilities towards the Social Insurance Institution (ZUS) and the Tax Office.
Restructuring Process and Court Approval
Thanks to the work of the arrangement supervisor, attorney-at-law Michał Burek, LL.M., qualified restructuring advisor (licence no. 1665), and the support team, agreements were reached with creditors, voting was conducted, and the arrangement was adopted.
The arrangement was confirmed by the District Court Poznań – Stare Miasto, on 12 November 2024.
Key Terms of the Approved Arrangement
- Secured creditors (bank and investment fund) – full repayment in accordance with the repayment schedules defined in the credit and investment agreements.
- Social Insurance Institution (ZUS) – full repayment of the claim with interest, in 48 monthly instalments with a 2-month grace period.
- Full remission of interest, court fees, enforcement costs and other ancillary claims for remaining creditors.
- Repayment of 70% of principal for remaining creditors, in 60 monthly instalments with a 2-month grace period.
- The arrangement regulates the joint and several liability of partners in the civil partnership (parallel restructuring proceedings for the second partner).
- 25 jobs were preserved within the civil partnership.
Facing Liquidity Problems? We Can Help
If your business is struggling with liquidity issues or at risk of insolvency, we encourage you to contact us.
We provide:
- individual and comprehensive case assessment,
- negotiations with creditors,
- preparation of realistic restructuring proposals,
- active support throughout the process of regaining financial stability.
