Bankruptcy and restructuring law

Preparation of the most optimal scenario in case of insolvency or threat of insolvency of the company

Where the analysis carried out for the purposes of determining whether the conditions for insolvency have been met shows that a company is insolvent or is at risk of becoming insolvent, it is crucial to choose the most optimal scenario for the company itself, the capital group it is part of, a creditor or a potential investor, depending on whose interest we are considering.

Therefore, the scope of our services includes a comprehensive analysis, not limited only to legal issues, but also taking into account the economic interest of our Clients, which results in presenting solutions that are most beneficial from the perspective of our Clients. In our recommendations for:

• companies in danger of insolvency or already insolvent we indicate in particular whether:

  • in specific circumstances it is possible to avoid or interrupt the state of insolvency, and if so, how

  • it is advisable to attempt out-of-court restructuring and, if so, how it should proceed

  • it is advisable to initiate one of the restructuring proceedings and, if so, which one

  • the initiating of bankruptcy proceedings is advisable

• creditors of companies in danger of insolvency or already insolvent we indicate in particular how they should recover their claims in order to satisfy their claims as far as possible

• investors interested in investing in companies in danger of insolvency or already insolvent we first of all indicate the most advantageous and the safest way to invest

Out-of-court restructuring

The company’s financial difficulties do not necessarily mean that one of the restructuring proceedings, let alone bankruptcy proceedings, has to be opened. In many cases it may be possible and economically viable to carry out so-called out-of-court restructuring, which may in particular consist in:

• obtaining external financing

• debt-to-equity swap 

• change in the terms of the agreements binding a company in danger of insolvency

• changing the business model, including through sale of redundant assets, termination of unprofitable part of the business and focusing on profitable activity

Within the framework of out-of-court restructuring of our Clients, we support them in particular through:

• support in attracting potential capital investors

• representation in negotiations with a potential investor or a company requiring funding, conducting due diligence and preparing investment documentation

• representation in negotiations on obtaining or granting external financing, including in the form of loans and credits, and preparing the necessary documentation in this respect

• advisory services in the process of issuing or acquiring debt securities

• advice on debt-to-equity swap

• assessment of the occurrence of grounds for breaching commercial and credit agreements, as well as obligations under other legal titles, including those arising from the terms and conditions of bond issue, in connection with a state of insolvency or a situation of threatened insolvency

• representation in negotiations and disputes relating to possible breach of obligations in connection with a state of insolvency or a situation of threatened insolvency

• representation in renegotiating the terms of individual contracts

• representation in negotiations on debt repayment and standstill agreements and preparation of such agreements

• advising on the disposal and acquisition of assets and organized parts of the enterprise, including conducting due diligence, representation in negotiations and preparation of relevant agreements and other transaction documentation

• securing the interests of management board members of the companies undergoing restructuring, creditor companies and investor companies by preparing legal opinions confirming the legitimacy of the actions taken

Restructuring proceedings

The aim of each of the four restructuring proceedings, i.e. the proceedings for approving the arrangement, the accelerated arrangement proceedings, the arrangement proceedings and the sanation proceedings, is to avoid bankruptcy and to improve the situation of the enterprise.

Our services in the field of restructuring proceedings include in particular:

• advice on choosing the right restructuring proceedings

• support in drawing up the restructuring application

• representation in negotiations with creditors in order to ensure the effective conduct of the restructuring proceedings

• comprehensive litigation services as part of the restructuring proceedings, including preparation of necessary pleadings and representation in relations with the court supervisor or the court administrator

As part of our activities, we support not only the restructured companies and entire capital groups that include such companies, but also their creditors, potential investors as well as the court supervisors and the court administrators established as part of the restructuring proceedings.

Bankruptcy proceedings

In some cases, bankruptcy may not only be necessary, but it may even be the best solution, especially from the perspective of the entire capital group to which the insolvent company or the company at risk of insolvency belongs.

In the field of declaration of bankruptcy and bankruptcy proceedings, we support not only insolvent entities and entire capital groups that include such entities, but also their creditors, potential investors, as well as the bankruptcy trustees, the court supervisors and the court administrators.

In the field of bankruptcy, our services include in particular:

• preparation of insolvent entities and the entire capital group for bankruptcy proceedings, including in particular through actions protecting managers of insolvent entities against possible liability and protecting interests of other entities in the group, as well as securing assets needed to cover the costs of the bankruptcy proceedings

• support in drawing up a bankruptcy application

• defending of the debtor against a bankruptcy application submitted by the creditor

• comprehensive legal services in bankruptcy proceedings, including:

  • preparation of necessary procedural documents

  • advice on obtaining injunction (court security) before declaration of bankruptcy

  • representation in relations with the court supervisor or the court administrator, if any

• comprehensive legal services in bankruptcy proceedings, including:

  • preparation of necessary procedural documents

  • advice on reporting of claims

  • advice on declaring the activities of the bankrupt as ineffective

  • representation in relations with the bankruptcy trustee

• support in entering into an arrangement in the course of the bankruptcy proceedings

• advice on pre-packaged liquidation (so-called pre-pack)

• advice on the debt-for-equity swap

• advice on cross-border bankruptcy proceedings of Polish companies in the territory of one of the EU countries, including support in the process of secondary bankruptcy of the entrepreneur’s subsidiaries in Poland or one of the EU countries.

Managers’ responsibility and legal proceedings relating to the insolvency and bankruptcy of companies

Insolvency and bankruptcy involve the risk of liability of managers, as well as a number of potential court proceedings that may be parallel to the bankruptcy proceedings. Due to the fact that our team consists of litigators with many years of experience, we provide our Clients with comprehensive services in all proceedings related to the insolvency or bankruptcy of specific entities, as well as services related to the mitigation of the risk of such proceedings.

Our services in this area include in particular:

• preparation of legal opinions on the possible liability of managers, including recommendations on the mitigation of the risk of their civil and criminal liability and securing the entity in the event of criminal proceedings being initiated against its representatives

• representation in civil proceedings concerning, in particular, the liability of the management board members for the late filing of an application for bankruptcy or so-called actio pauliana 

• representation in criminal proceedings concerning, in particular, the liability of management board members in connection with the late filing of an application for bankruptcy, indicating of false data in an application for bankruptcy, thwarting of the satisfaction of the creditors and the harm to others