The COVID-19 and its impact on Polish bankruptcy and restructuring law

Outbreak of the Covid-19 virus epidemic forced the Polish legislator to amend the applicable law and adopt new regulations. Amendments are aimed at both preventing the spread of the coronavirus and avoiding the negative impact of the epidemic on the Polish economy. In connection with the need to counteract the coronavirus, the Polish government has prepared the:

1. act on specific solutions related to the prevention, counteraction and eradication of COVID-19, other infectious diseases and crisis situations caused by them. The purpose of this act is primarily to fight COVID-19, it does not contain tools to support the entrepreneurs to combat the negative effects of the epidemic for the Polish economy.

2. the package of acts called the "anti-crisis shield 1.0”. The package included the act on the amendment of the above-mentioned act, significantly changing and extending its content, as well as act on granting public aid to rescue or restructure entrepreneurs and the act amending the act on the system of development institutions. The anti-crisis shield 1.0 includes solutions that provide ad-hoc support to entrepreneurs who need help because of the epidemic and government restrictions on business activity introduced to stop the coronavirus.

3. the "anti-crisis shield 2.0” – act on specific support instruments in connection with the spread of the SARS-CoV-2 virus. The purpose of this act is to provide means to rescue enterprises that have found themselves in a difficult situation due to coronavirus.

1)Support introduced by the act is not intended for bankrupts or entrepreneurs undergoing restructuring proceedings. If the bankruptcy or restructuring application regarding the entrepreneur was filed, the procedure of granting the support will be suspended.

2)On the other hand, the same act introduces new regulations affecting the bankruptcy and restructuring cases. According to the act, if the basis for declaring the debtor's bankruptcy arose during the period of epidemic emergency or epidemic state and the state of insolvency was caused by the coronavirus, the deadline for filing for bankruptcy does not start, or if it started – it is interrupted. The deadline shall not start until the end of the epidemic emergency or epidemic state. What is more, the act provides a presumption that insolvency state arose during the coronavirus epidemic also arose because of it. In other words, the act provides for the suspension of the obligation to file for bankruptcy, which has a significant effect from the point of view of the responsibilities of members of the bodies of an insolvent entity. Filing for bankruptcy within the time limit introduced by the act will result in extending the deadlines for which the day of the application for bankruptcy is relevant. The deadlines will be extended for the number of days between the date of filing for bankruptcy and the last day on which the application should be submitted if the normal rules of bankruptcy law were applied.

3) In the field of restructuring law, the act provides that cases for consideration of the restructuring application will be urgent, which means, that if the court stops operating due to the epidemic, these cases will be heard by other courts.