Our firm has recently represented two creditors in arrangement approval proceedings (postępowanie o zatwierdzenie układu) which, in our well-founded view, were initiated by the debtors in order to prejudice their creditors.
In one of these cases, the effects of the announcement of the arrangement day (obwieszczenie o ustaleniu dnia układowego) have already been revoked by a final decision, and approval of the arrangement has been finally refused. The courts accepted our arguments, finding that the debtor’s aim was to block pending enforcement proceedings rather than to genuinely restructure its liabilities.
In the other case, the court, in the arrangement approval proceedings, ordered the debtor to provide detailed explanations in response to the objections we had raised. The case is pending.
Restructuring – scope for abuse
Our experience shows that arrangement approval proceedings are, unfortunately, sometimes used contrary to their intended purpose. Most often the aim is simply to bring pending enforcement to an immediate halt.
In the past year alone, we have encountered the following practices in arrangement approval proceedings:
creating new liabilities towards entities related to the debtor on the eve of the arrangement day, solely to shift the balance of votes on the arrangement (the debtor acknowledges the artificially created debt as undisputed and includes it in the list of claims; the arrangement proposals then provide for the remission of 90% or more of the new debt, to which the “creditor” agrees surprisingly readily, thereby ensuring that the arrangement is “voted through”);
making selective repayments to chosen creditors after the deadline for casting votes on the arrangement has passed, after which those creditors change their votes to “in favour”, altering the outcome of the vote;
failure by debtors seeking approval of an arrangement to file their financial statements on time, which in itself calls into question the debtor’s reliability as a market participant;
persistent failure by debtors to meet ongoing liabilities arising after the arrangement day, which justifies the presumption that the arrangement will not be performed.
Even secured creditors (mortgagees in particular) must be aware of two risks. The mere initiation of restructuring proceedings by the debtor may delay the satisfaction of their claims by many months. Remaining passive in the proceedings may significantly complicate debt recovery for years to come.
The popularity of restructuring proceedings
Arrangement approval proceedings (“PZU”) conducted with an announcement of the arrangement day are currently by far the most frequently chosen restructuring procedure.
In 2025, approximately 5,100 restructuring proceedings were opened in Poland, of which around 90% were arrangement approval proceedings.
By comparison, approximately 400–450 business bankruptcies have been declared annually in recent years. Only around 20% of cases in which a bankruptcy petition is filed actually end with a declaration of bankruptcy.
Around 70% of restructuring proceedings are initiated by sole traders (natural persons conducting business activity).
Risks for creditors
The scale of interest in restructuring is sometimes presented as a success. On this view, it shows that businesses have learned to turn to recovery tools rather than liquidation.
From the creditors’ perspective, the picture is less clear-cut.
Arrangement approval proceedings are the only instrument in the Polish legal system that allows enforcement to be stayed without any involvement of the court, in practice for many months. The entire period during which the debtor is protected from enforcement elapses without any court ruling. The court becomes involved only at the stage of the application for approval of the arrangement. By then, the benefit of the announcement has already been fully reaped. A debtor whose sole aim is a four-month break from enforcement faces no sanction whatsoever: it simply refrains from filing the application.
The announcement of the arrangement day and its effects
The announcement of the arrangement day is made by the arrangement supervisor (nadzorca układu), i.e. a licensed restructuring adviser engaged by the debtor. The debtor selects the supervisor itself, enters into an agreement with them and pays their fee.
The announcement is made without any court review.
The arrangement supervisor makes the announcement after drawing up the list of claims, the list of disputed claims and the preliminary restructuring plan.
The announcement is published in the National Register of Debtors (Krajowy Rejestr Zadłużonych, KRZ).
Upon the announcement:
Enforcement proceedings against the debtor’s assets are stayed by operation of law. New enforcement proceedings cannot be commenced, and interim security orders cannot be enforced. As a rule, the protection also extends to enforcement against collateral subject to in rem security. It therefore also affects creditors whose claims are not covered by the prospective arrangement at all.
The debtor is protected against termination by the lessor of a lease or usufructuary lease (dzierżawa) of premises or real property in which the debtor’s business is conducted. Termination of credit facility agreements, leasing agreements, property insurance policies, bank account agreements, sureties, guarantees and letters of credit is also blocked.
The debtor is protected against a declaration of bankruptcy. From the announcement until the case is finally concluded, the debtor cannot be declared bankrupt.
The debtor’s protection expires if no application for approval of the arrangement is filed with the court within four months of the announcement.
If such an application is filed, the protection continues. Examination of the application by courts of two instances may, in practice, take anywhere from several months to well over a year.
Abuse may also occur at the stage of filing the application for approval of the arrangement, and in practice not infrequently does. An application filed in bad faith extends the debtor’s protection. This holds even where the arrangement was not adopted in the vote, or was adopted in circumstances raising serious doubts.
The origins of PZU
PZU with an announcement derives directly from legislation enacted during the COVID-19 pandemic.
The Act of 19 June 2020 on interest subsidies for bank loans granted to businesses affected by COVID-19 and on simplified arrangement approval proceedings in connection with the occurrence of COVID-19 (Journal of Laws of 2020, item 1086), commonly known as the “Anti-Crisis Shield 4.0”, introduced simplified restructuring proceedings in Articles 15–25.
A debtor that had entered into an agreement with a licensed restructuring adviser for the supervision of the proceedings could itself publish an announcement of the opening of the proceedings in the Court and Commercial Gazette (Monitor Sądowy i Gospodarczy). The date of the announcement was the date on which the proceedings were opened. The debtor first had to prepare arrangement proposals, a list of claims and a list of disputed claims. Notably, the legislature did not require the debtor to show any connection between its difficulties and the pandemic.
The solution was intended to be temporary. Originally, announcements could be made until 30 June 2021.
The Act of 28 May 2021 amending the Act on the National Register of Debtors and certain other acts (Journal of Laws of 2021, item 1080) extended that deadline to 30 November 2021. At the same time, it transferred the core of the mechanism permanently into the Restructuring Law.
On 1 December 2021, Articles 226a–226h of the Restructuring Law entered into force, forming a separate chapter entitled “Effects of the announcement of the arrangement day”. On the same day, the National Register of Debtors was launched and became the official publication medium. This gave rise to the variant referred to in practice as “PZU 2.0”. It exists alongside the classic arrangement approval proceedings without an announcement, which have in essence remained a dead letter. The legislature also introduced two new safeguards for creditors that the pandemic-era provisions had not provided for:
a ten-year cooling-off period between successive PZU proceedings (Article 226a(2) of the Restructuring Law);
the court’s power to revoke the effects of the announcement (Article 226f of the Restructuring Law).
In this way, PZU “by announcement” has become a permanent feature of the legal landscape.
The creditor’s toolkit
Protecting a creditor’s interests in PZU initiated by a debtor requires vigilance and proactive action.
Monitoring the KRZ. The announcement is not served on creditors. A creditor with significant exposure should monitor the register on an ongoing basis for its key counterparties. For landlords, a delayed reaction means losing the right to terminate the lease for the entire protection period. Despite the KRZ having been in operation for several years, many market participants are still unaware of two rules. First, announcements published there take effect against all parties immediately upon being posted on the so-called announcements board. Second, any steps in restructuring proceedings taken outside the KRZ IT system have no legal effect.
Requesting information from the supervisor. The supervisor is obliged to provide a creditor with information on the debtor’s financial position and on the feasibility of the arrangement, to the extent necessary for the creditor to make an economically rational voting decision. The response, or the lack of one, often proves to be the best evidence for subsequent steps.
Application to revoke the effects of the announcement. The court revokes the effects of the announcement if they result in prejudice to creditors, or if it transpires that the debtor has already benefited from restructuring within the preceding ten years.
Voting against the arrangement and raising objections. Objections may concern a range of procedural and substantive issues. Above all, they may point out that the arrangement will not be performed, given that the debtor is failing to pay liabilities arising after the arrangement day.
Appealing against the order approving the arrangement.
A debtor’s opening of PZU should prompt a creditor to seek professional legal assistance without delay. Several further circumstances and observations from practice support this.
The list of claims is drawn up on the basis of the debtor’s books and documents. A creditor that has been omitted, or listed at an understated amount, may learn of this only upon receiving the ballot for the vote on the arrangement. If it has been omitted entirely and does not monitor the KRZ, it may never learn of the proceedings at all. PZU provides no procedure for objecting to the list of claims of the kind available in other restructuring proceedings. In practice, objections on this point can be raised only at the arrangement approval stage.
During PZU there is no prohibition on satisfying claims covered by the prospective arrangement. The debtor may therefore pay certain creditors while the remaining creditors’ enforcement proceedings are frozen and their right to terminate agreements is blocked.
Even if PZU ends favourably for the creditor, the debtor may still resort to other legal instruments and make further attempts to frustrate enforcement.
