Bankruptcies – for the debtor
Petition in bankruptcy
The debtor is required to file a petition in bankruptcy within 30 days of the date on which the basis for the declaration of bankruptcy occurred, i.e. the date on which he or she became insolvent. In the case of legal persons and organizational units, this obligation lies with anyone who under a law, or articles of association, or articles of partnership has the right to manage the debtor’s affairs and to represent them, alone or jointly with other persons.
The declaration of a state of insolvency requires an in-depth analysis. It is assumed that the debtor has lost the ability to perform his or her due monetary obligations if the delay in the performance of monetary obligations exceeds three months.
Liability for the failure to file a petition in bankruptcy
Persons required to file a petition in bankruptcy shall be liable for damage caused as a result of their failure to file the petition within a reasonable time limit. In the case of the raising of a claim for damages by the creditor of an insolvent debtor, it is assumed that the damage includes the amount of this creditor’s unsatisfied claims against the debtor. Management board members of limited liability companies may also be liable under Article 299 of the Commercial Companies Code. Failure to file a petition in bankruptcy in due time does not always entail liability for damages. A sued management board member can defend himself or herself in different ways.
Requests to exempt assets from the bankruptcy estate
When determining the composition of the bankruptcy estate a mistake can be made, which will result in the sale by the trustee in bankruptcy of an asset that did not constitute the bankrupt’s assets. Sometimes there is a dispute as to who owns a given asset. Components of the property belonging to the bankrupt’s assets are exempt from the bankruptcy estate as a result of an application for exemption from the bankruptcy estate.
The decision to exempt assets from the bankruptcy estate can be appealed against by either or both of the bankrupt and his or her creditors.
On 1 January 2016, the institution of the so-called prepared liquidation was introduced into Polish bankruptcy law. It allows the selling of a company, its organised part or assets, representing a significant part of the debtor’s business, under the conditions indicated in the petition in bankruptcy, and then approved by the court.
An advantage of prepared liquidation is the fact that the person of the buyer and the price may be indicated by the entrepreneur who files a petition in bankruptcy. Such a sale is of the nature of an enforcement, and therefore the buyer purchases an item without any charges. The parties do not expose themselves to the challenging of the sales contract under the provisions on the unenforceability of legal acts in relation to the bankruptcy estate.
Prepared liquidation effectively reduces the costs of bankruptcy proceedings and prevents substantial loss of a company’s value in case of its suspension, owing to which creditors can be satisfied to a higher degree.
A company’s description and estimation
A company’s description and estimation are primarily aimed at determining its value, which is the basis for determining the selling price. The bankrupt has the right to challenge the description and estimation.
The redemption of liabilities of a bankrupt who is a natural person
Within 30 days of the notice of the decision on the termination of bankruptcy proceedings, the bankrupt who is a natural person may submit an application to establish a plan to repay his or her creditors and repay the remainder of the liabilities that have not been satisfied in the bankruptcy proceedings. The court will dismiss the application if the bankrupt has led to his or her insolvency or significantly increased its level, intentionally or through gross negligence.
The ban on doing business
The court may order, for a period from 1 year to 10 years, the deprivation of the bankrupt of the right to do business on their own account or in a civil partnership, and to act as a supervisory board member, audit committee member, representative or plenipotentiary of a natural person engaged in business activity in the scope of this activity, a commercial company, state enterprise, cooperative, foundation, or association. Such a decision may concern, among others, a person who, by their own fault and being obligated to do so by law, has failed to file a petition in bankruptcy within the statutory period.