The Law on restructuring of 15 May 2015 will become effective on 1 January 2016.
The above mentioned legislative act results from the negative experience connected with ten years of the application of the Act of February 28 2003 – Bankruptcy and Reorganization Law, including the belief that bankruptcy proceedings are time-consuming, generate high costs and offer the creditors satisfaction of claims which is far from acceptable.
The main purpose of this Law is to introduce effective instruments enabling one to efficiently conduct the restructuring of the debtor's company and to prevent its liquidation. The authors of this Law are of the opinion that, in many cases, saving the company is more advantageous to the creditors than its liquidation.
The authors also claim that one of the main reasons for the inefficiency of the current regulations is the implementation of recovery procedures within the framework of bankruptcy proceedings, which intrinsically eliminate any possibility of an effective restructuring due to the stigmatizing nature of bankruptcy. For this very reason, the new Law referring to pre-war regulations, excludes the restructuring procedures from insolvency proceedings and highlights the primacy of restructuring over liquidation.
Despite recommendable assumptions and the introduction of many innovative (and, at the same time, positive) solutions, some inconsistencies could not be avoided in the above mentioned amendment. In accordance with the opinion of our legal office, one of the main drawbacks of the Law is the separation of some of its regulations from the practice applied in business trading and a failure to adjust the obligations specified in the Law to reality. The assumption that appears to underlie the Law, according to which any insolvent company or a company at risk of insolvency may be effectively restructured only on condition that it strives for reorganisation, is also questionable. According to common knowledge, not every enterprise with financial difficulties can survive, especially if it operates within a mature, competitive and highly innovative market.
Despite the above concerns, our legal office considers the new Law on restructuring as an effective instrument for over-indebted entrepreneurs, provided that the individual entrepreneur striving for reorganisation is able to select and properly apply a relevant instrument from among the wide spectrum of reorganisation instruments provided for in the Law.
Our legal office provides comprehensive assistance in the field of consultancy with reference to the application of the Law on reorganisation. Under a civil-law contract, our legal office may act as a court supervisor in the composition proceedings.
Our legal office also offers assistance for investors, including investment funds looking for investment targets of a high rate of return. We offer our assistance in searching for investors for companies in difficult financial situations interested in the restructuring process. In most cases, it is difficult to implement an effective restructuring process without procuring external funds during the transitional period.