Protecting Lender Interests: The Effectiveness Of Security Documents In Polish Restructuring Proceedings

In recent years, Poland has seen a significant rise in restructuring proceedings. These proceedings are an alternative to bankruptcy, aiming to remedy the debtor's situation and to enable continued business activity. Various types of security interest are available to creditors under Polish law, each of which offers differing protections to creditors. The way in which such interests are dealt with in a restructuring process is discussed below with a view to understanding the discussions a creditor/debtor may have once the debtor is in financial difficulties, and the factors at play in deciding how to proceed.

Restructuring proceedings under Polish law

In recent years, the number of restructuring proceedings in Poland (regulated by the Restructuring Act of 15 May 2015 (as amended) and in Polish referred to as postępowanie restrukturyzacyjne) has increased significantly. In 2023, according to the Central Office of Commercial Information (Centralny Ośrodek