Insolvency 25. March 2020

Poland: Public support for restructuring

25. March 2020
Barbara Szczepkowska
act legal Poland

The legislative efforts to help business in the face of the coronavirus epidemic are gaining steam. One of the legal acts currently under consideration is the act on public support to rescue or restructure businesses, a draft of which was published on March 20, 2020. The document has gone to the Social Dialog Council (Rada Dialogu Społecznego) for assessment. Its final shape is yet unknown.

The solutions under consideration cover public support for businesses who are in need of: (a) rescue, (b) provisional restructuring support, (c) restructuring. The main form of help to be provided are loans which can be taken out in each of the above cases. In accordance with the draft bill, such a loan would be secured, with the available security types including a mortgage, a civil-law pledge or a registered pledge, claims assignment, a statement on submission to enforcement and a blank promissory note. Other support offered to businesses which have the option of restructuring is, i.a. shares or bonds subscription, payment of an administrative fine in instalments or cancellation of the fine.

The governmental aid proposed in the draft bill is worth PLN 100m a year, with up to 69% of this amount (PLN 69m) earmarked for loans, further 29% (PLN 29m) for shares or bonds subscriptions and the remaining 2% (PLN 2m) intended to cover the cost of providing the support.


Conditions regarding the purpose of the support

Eligible business should show that the governmental aid will be used to prevent and mitigate social difficulties or overcome market challenges (as defined in detail in the act) as well as demonstrate that in case the support is not provided, these goals will not be fulfilled or will not be fulfilled as fully. Additional conditions have been determined for businesses with assets acquired from another business which received governmental aid before the transaction, as well as for businesses belonging to capital groups. Further detailed requirements have been also defined with respect to the different purposes the aid may be used for: (a) company rescue, (b) provisional restructuring support, (c) restructuring.

Conditions regarding the business

The financial aid is addressed to a limited number of businesses. Eligible businesses must be able to show that they are insolvent, as defined in the Bankruptcy Law, or are facing insolvency, as defined in the Restructuring Law. In the latter case, businesses are also required to satisfy additional conditions related to showing the incurred losses and/or the debt-to-equity ratio.

The financial aid will not be available to businesses which, i.a.:
1) have been operating less than 3 years before applying for the government’s help,
2) operate in the steel, coal mining or finance industry,
3) operate in a market with long-term structural overcapacity or facing long-term structural overcapacity,
4) have already been provided with public support within the last 10 years, with some exceptions allowing to apply for the help sooner. The exceptions cover cases where the help is sough as part of the same procedure regarding the grant of financial aid as on the previous occasion of using governmental support. For instance, it will be possible to obtain help for company rescue, followed by provisional restructuring support and, finally, restructuring.

The abovementioned restrictions will not apply to a business providing services of general economic interest, where the help is necessary to ensure their continuity, however, only until the obligation to provide these services is transferred to another business.


Generally, in accordance with the draft bill, a business should apply for the financial support to the minister competent to handle economic affairs, however, the minister may delegate its powers to the extent of this aid program to the Industrial Development Agency (Agencja Rozwoju Przemysłu).

The application should be appended with information and documents similar to the ones required in the case of filing for restructuring, with some types of information required to be provided in more detail (thus, the formal requirements regarding the application may be quite high). The application for company rescue will require the narrowest scope of information. Next in the order of complexity is the application for provisional restructuring support, with the most detailed information being required in the case of the application for restructuring support.

The applications will be processed in the course of administrative procedure. The decision issued as a result will be appealable. Once filed, the application should be examined within the deadline of 30 days, which may be extended up to 60 days if a given case is especially complex.

The proposed changes are a step in the right direction to help struggling businesses obtain the government’s support at the time of epidemic. However, there are some doubts as to the relatively long period of application processing and the lack of practical consequences in case the application is not examined on time.

Let us know if you have any questions.

Barbara Szczepkowska
act legal - BSWW legal & tax
About the authors

Barbara Szczepkowska


Her practice focuses on bankruptcy and restructuring proceedings regarding businesses, during which she represents creditors and debtors alike. Having advised receivers, court-appointed supervisors and administrators, she boasts vast experience in advising insolvency practitioners. During restructuring processes, she has drafted key documents addressed to bodies handling the proceedings, such as restructuring plans and arrangement viability opinions. She assisted in proceedings involving over 1500 creditors and PLN 500m in debt, advising clients on all the facets of the process, from the selection of best-suited type of restructuring proceedings, through petition drafting and the court’s approval of the arrangement. Moreover, Barbara offers support in pre-pack liquidation proceedings. Bankruptcy and restructuring proceedings have also been the focus of numerous legal opinions prepared by her. Barbara has successfully protected clients’ interests in a few dozen personal bankruptcy processes ending in the release of former business owners and management board members (among others) from their debts. One of her clients had a record-high debt of over PLN 90m. She also represents clients before courts in a variety of other cases, including ones regarding complex fraudulent transfer claims (also ones involving a receiver) and major damages recovery cases, e.g., against receivers in connection with damage caused by them in bankruptcy proceedings. She also handled litigation between a creditor and a receiver aiming to determine whether the transfer of the bankrupt’s patent rights to the receiver was ineffective vis à vis the bankruptcy estate, which she won following an appeal. Prior to joining act BSWW, Barbara worked for many years for Zimmerman i Wspólnicy.

Marek Miszkiel


Marek provides ongoing legal support to businesses, mostly construction and investment companies. He has participated in numerous due diligence audits regarding real properties and companies. Marek is also adept at solving commercial disputes in terms of pre-trial and trial procedure. His range of duties also includes representing both creditors and bankrupts alike in bankruptcy proceedings.

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