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The main change introduced to bankruptcy proceedings and the most important element of the new restructuring proceedings, which are in force as of January 2016, is the new actual influence of the creditors on the proceedings. In the past, creditors’ interest was the main concern of bankruptcy and reorganisation proceedings. Nevertheless, creditors who had a chance to deal with these proceedings in practice seem to think that this concern exists only in theory. The Law in the previous wording allowed the bankruptcy proceedings even when the value of the bankruptcy estate was only enough to cover the costs of proceedings. Unfortunately, it used to be the case that the receiver, whose responsibility was to care for the estate, and therefore, for the creditors’ interest, did not show sufficient care for or proficiency in the estate liquidation and creditors’ satisfaction. And creditors could do almost nothing about this. Now the Bankruptcy Law offers real, efficient measures which enable creditors to take over control of bankruptcy proceedings and the restructuring process. Now it’s the creditors who decide on their course. But this happens only when creditors are an active party to the proceedings. Only genuine interest and proactive attitude in the bankruptcy or restructuring proceedings guarantee higher satisfaction of creditors. There is a need of a new strategy for creditors who would like to recover their receivables in bankruptcy or restructuring proceedings.
The debtor is evading the payment of their financial liabilities? Endless, futile court disputes have blocked the payment of due receivables? The debtor is stalling and concealing their assets or transferring them to other entities or otherwise preventing future enforcement? Under a bankruptcy petition or a request to initiate restructuring proceedings against the debtor, creditors may effect a global debt enforcement while retaining control over every step of proceedings. The debtor has any assets that, when duly developed, may make up for the debt? It is essential to take over debtor’s enterprise in such a way so as not to disrupt its activity but at the same time prevent the debtor from excluding the assets from enforcement? It is possible to benefit from the pre-packaged bankruptcy and buy out the enterprise of an insolvent debtor or some assets thereof at the beginning of bankruptcy proceedings. In such a case, the official receiver will not be forced to shut down the facility (and it’s worth remembering that an active enterprise is far more valuable than debris usually remaining after several years of bankruptcy proceedings).
What do we do? We develop and implement strategies aiming at recovering receivables, gaining ownership of specific assets, as well as taking over control of debtor’s enterprise for the purpose of satisfying creditors’ claims, and in the case of debtor’s insolvency. We ensure the proactive attitude of a creditor in bankruptcy or restructuring proceedings, which is reflected in their actions and the possibility to benefit from multiple powers in the course of proceedings, in particular, we enable them to sit in the Creditors’ Committee, which is entitled to revoke receivers, administrators and administrative receivers who fail to duly perform their duties. We increase odds for satisfying creditors’ claims.
New legislation sets out additional liability of board members and entrepreneurs’ representatives for debts of entities managed by them. Since January 2016, board members of limited liability companies have not been the only ones facing a threat of joint liability for the debts of their companies. Nowadays, joint-stock companies and partnerships are also subject to regulations which provide an easy way to transfer non-enforced debts onto the management of debtor’s enterprise. The provisions concerning criminal liability for not filing a bankruptcy petition within required term, as well as those concerning lowering the extent of satisfied creditors’ claims have remained intact. The above, supplemented by the long-time existing liability for public and legal receivables and provisions of the Penal and Fiscal code supporting thereof, lead to a disaster affecting private assets of board members and representatives. If board members are in possession of any private assets, the debt enforcement against them is most of the time the only way to recover at least some part of debt.
What do we do? We analyse the grounds for liability of board members, and we represent the creditors in enforcement proceedings, which aim at recovering the debt of an insolvent company from its current or former board members. We draw up lawsuits and offer legal representation in the course of court proceedings.
If a company is insolvent, it is often a case that their owners try to transfer or conceal its most valuable assets so as not to satisfy creditors’ claims. In such a case, a fraudulent conveyance claim (actio pauliana), that is a legal action brought under Article 527 of the Civil Code, may prove useful. It is addressed to a person who got richer at the expense of creditors of a given entity. Usually, it is creditors’ last resort. It is possible to challenge an illegal action before an administrative authority within 5 years from committing thereof. The procedure itself is complicated and requires a lot of patience and due diligence in collecting evidence; however, thanks to the professional assistance, the most valuable assets of an insolvent debtor, which they tried to exclude from enforcement (since they expected financial trouble in the future), are often successfully recovered.
What do we do? We draw up lawsuits under fraudulent conveyance claim and represent creditors in the course of civil court proceedings. We advise on the best ways to recover receivables, including those involving instruments enabling the recovery of gained goods from beneficiaries of transactions which aim at causing harm to the debtor’s creditors. We provide assistance to creditors and official receivers, who as representatives of creditors are also entitled to use the right of fraudulent conveyance claim, in satisfying claims against beneficiaries of acts performed to their detriment before common courts and the Supreme Court.
