Navigating cross-border financial distress is inherently complex. For foreign creditors,
investors, or corporate partners dealing with a distressed entity in Poland, understanding the
local legal framework is the critical first step.
Unlike some jurisdictions where bankruptcy and reorganization are consolidated under a
single legislative act, Poland operates under a dual system: the Bankruptcy Law (Prawo
upadłościowe) and the Restructuring Law (Prawo restrukturyzacyjne). Misunderstanding
the difference between these two regimes can lead to missed deadlines, lost voting rights,
and ultimately, unrecovered debts.
Here is what foreign entities need to know about the Polish insolvency landscape.
1. The Core Difference: Liquidation vs. Survival
The fundamental distinction between the two regimes lies in their primary objective.
● Bankruptcy Proceedings (Upadłość): The primary goal is the liquidation of the
debtor’s estate to satisfy creditors to the highest extent possible. It is applied when a
company is definitively insolvent (illiquid or over-indebted). The management loses
control of the company, and a court-appointed receiver (syndyk) takes over to
liquidate assets.
● Restructuring Proceedings (Restrukturyzacja): The objective is to avoid
bankruptcy by allowing the debtor to reach an arrangement (układ) with its creditors
while continuing business operations. It is available to companies that are insolvent
or merely threatened with insolvency.
2. The Four Types of Restructuring in Poland
If your Polish contractor files for restructuring, you will likely encounter one of four specific
proceedings introduced by the 2016 Restructuring Law (and heavily aligned with the EU
Directive 2019/1023 on preventive restructuring frameworks):
- Arrangement Approval Proceeding (Postępowanie o zatwierdzenie układu): The
most popular out-of-court procedure. The debtor chooses a restructuring advisor,
collects votes from creditors independently, and only goes to court for the final
approval. - Accelerated Arrangement Proceeding (Przyspieszone postępowanie
układowe): A simplified court process available only if disputed claims do not exceed
15% of the total claims. - Standard Arrangement Proceeding (Postępowanie układowe): Used when
disputed claims exceed the 15% threshold. It is more formal and time-consuming. - Sanative Proceeding (Postępowanie sanacyjne): The most invasive form. It
provides the debtor with the strongest protection against execution but involves a
deep overhaul of the company under the strict supervision of an administrator.
3. The KRZ System: The Biggest Barrier for Foreign
Creditors
Since December 2021, all insolvency and restructuring proceedings in Poland have been
fully digitized through the National Register of Debtors (KRZ – Krajowy Rejestr
Zadłużonych).
While digitization increased transparency, it inadvertently created a massive hurdle for
foreign entities. To access the KRZ system, view case files, file claims, or vote on a
restructuring arrangement, a user must authenticate their identity using a Polish electronic ID
(Profil Zaufany) or an advanced qualified electronic signature registered in Poland.
What does this mean for you? Foreign corporate creditors usually cannot log into the
system directly. The standard and most secure practice is to grant a Power of Attorney (PoA)
to a licensed Polish lawyer who has verified access to the KRZ. Missing the strict deadlines
(e.g., typically 30 days to file a claim in bankruptcy) because of technical login issues will
result in the loss of your right to participate in the distribution of funds.
4. Cross-Border Implications (EU Reg 2015/848)
For creditors within the European Union, Polish insolvency proceedings are governed by the
EU Insolvency Regulation (2015/848). If the Polish company’s Center of Main Interests
(COMI) is in Poland, the main insolvency proceedings will be opened in Warsaw, Kraków, or
another local jurisdiction, and will have universal scope—encompassing all the debtor’s
assets globally. However, if your company has specific secured rights (like a mortgage or
registered pledge) over assets located in your home country, those rights may be subject to
specific protections under the Regulation.
Summary: Act Fast and Seek Local Expertise
When a Polish partner enters distress, time is your most valuable asset. The deadlines for
filing claims in the KRZ system and analyzing complex restructuring proposals are
notoriously short. Foreign creditors who wait for traditional paper notifications often find out
they have been legally bound by an arrangement they never voted on (the so-called
„cram-down” effect).
Do you have an outstanding claim against a Polish company in bankruptcy or
restructuring? Don’t let administrative barriers in the KRZ system prevent you from
recovering your funds. At MB/LAW – Restructuring, we specialize in representing foreign
creditors and investors in Polish proceedings. We handle the KRZ filings, assess the legal
risks, and vote on your behalf to protect your corporate interests.
Contact MB/LAW today to schedule an introductory call and secure your rights in
Poland.
Michał Burek, LL.M. — Attorney at Law, Qualified Restructuring Advisor, owner of MB/LAW. He specializes in corporate law, restructuring law, and legal services for entrepreneurs, including projects with a cross-border element.
This article is for informational purposes only and does not constitute legal advice in any specific case. Registering a company with foreign shareholder participation requires a case-by-case analysis of the shareholder structure, documents, signatures, business model, and tax and compliance obligations.
