MSD’s practice covers the area of bankruptcy and restructuring law. We support creditors, debtors, management board members of entities that are or may be insolvent.

BANKRUPTCY

The purpose of bankruptcy proceedings is to liquidate the bankrupt’s assets and use the funds obtained to satisfy creditors. In the course of the proceedings, creditors, through the Creditors’ Council, have real influence on the trustee, e.g. through the possibility of their dismissal or ongoing control of their actions.

MSD supports interested parties by offering a very broad, diversified range of activities:

•  analysing the company’s financial situation with a view to insolvency;
•  drafting bankruptcy petitions;
•  analysing the company’s financial documents with a view to releasing members of the management board from the company’s liabilities,
•  preparing claims declarations to the bankruptcy estate,
•  preparing objections against the list of claims,
•  representing Clients at the stage of liquidation of the bankruptcy estate,
•  filing objections to the plan of distribution,
•  representation in proceedings on exclusion from bankruptcy estate,
•  representation in proceedings to declare ineffective any acts performed by a bankrupt before filing the bankruptcy petition,

Wherever possible, MSD supports its Clients in preparing and carrying out an organised, structured migration of a company to a new, agreed buyer under the so-called Pre-pack Procedure. This enables a rapid sale of a bankrupt company so that the company remains in operation and jobs, contracts, and customers are retained. Pre-pack may include bankrupt’s whole enterprise, its organized part, or assets constituting a significant part of the enterprise (e.g. real estate). As a rule, the buyer in this procedure may be any entity.

RESTRUCTURING

MSD also supports its Clients in preparing and conducting restructuring proceedings. The essence of restructuring is not only to reduce debts, but also to restore the ability of an entrepreneur to operate freely and competitively in the market. The Restructuring Act makes it possible to carry out enterprise restructuring without bankruptcy. The Act is addressed to entities that are in a state of insolvency or are at risk of insolvency, but have arguments to remedy the situation by implementing recovery actions and making arrangements with the creditors.

There are four ways to restructure liabilities: proceedings for approval of an arrangement, accelerated arrangement proceedings, composition proceedings, and the most far-reaching rehabilitation proceedings. In each of them, MSD can support its Clients by (among other things):

•  conducting restructuring audits to determine the nature of the necessary corrective measures and their procedure and scope,
•  drawing up proposals for opening recovery proceedings,
•  preparing restructuring plans,
•  preparing legal opinions for company bodies,
•  support in obtaining the most optimal sources of financing, investors,
•  protective actions against bankruptcy petitions,
•  ongoing consulting, including development and implementation of restructuring strategies, taking into account all legal aspects of the restructuring,
•  support in negotiations concerning financing and conditions of repayment of liabilities,
•  representation of creditors before the bodies of insolvency proceedings,
•  support in the activities of creditors’ councils and preparation of motions for their appointment.

SIMPLIFIED RESTRUCTURING PROCEDURE (SRP) DUE TO THE EFFECTS AND CONSEQUENCES OF COVID-19 PANDEMIC

The solution in question is of great interest to companies facing liquidity problems due to the COVID-19 pandemic and the related complications. By the end of 2020, more than 250 simplified restructuring procedures had been launched, making it the most preferred means of debt relief among available insolvency procedures. It appears that the SRP will continue to be an attractive way for industries at risk of insolvency, in particular hospitality, tourism, catering, construction, to free themselves from liabilities and at the same time provide a rescue from bankruptcy.

The main advantages of the SRP are:

• the fact that the procedure in the vast majority is carried out off-court,
• there is freedom in the choice of the supervisor – it is the entrepreneur who chooses the restructuring advisor and signs a contract with them,
• as soon as the above-mentioned announcement is published, enforcement and security proceedings are suspended.

The simplified restructuring procedure is currently the fastest and least formal way to restructure a business. Therefore, it is not surprising that it is eagerly chosen by entrepreneurs. The final deadline for initiating the SRP (date of announcement in Monitor Sądowy i Gospodarczy) is the end of June 2021.

MSD offers comprehensive legal assistance in preparing the company and its managers for a smooth implementation of the entire simplified restructuring procedure, including preparation of the necessary documentation and implementation of the restructuring plan.