On 1 December 2021, an amendment to the Act on
National Debtor Register and Certain Other Acts
(“Amendment”) came into force. One of the most
significant changes ushered in under the Amendment is
the complete revamping of the—so far highly niche—
arrangement approval proceedings.
The arrangement approval proceedings are an
offshoot of the simplified restructuring proceedings
(“SRP”), very popular during the pandemic, that were
enacted under the Act on Subsidies to Interest Rates on
Bank Loans Granted to Businesses Affected by COVID-
19 and on Simplified Arrangement Approval
Proceedings in Connection with Emergence of COVID-
19, also known as Shield 4.0. The main advantage of
the SRP was the ability to announce the opening of the
arrangement conducted under the provisions of the
restructuring law. This type of announcement could only
be made once. Its main effect was the suspension of all
the enforcement proceedings pending against the
debtor until the conclusion of the proceedings. The SRP
turned out to be an extremely popular measure,
eagerly opted for by businesses. However, from the
very outset it was intended as a temporary solution.
Thus, when on 30 November 2021 the option of the SRP
ceased to be available, the legislators replaced it with
the completely revamped arrangement approval
proceedings. The arrangement approval proceedings
fall into several stages.
The first step is for the debtor to enter into an
agreement for supervision over the proceedings with a
restructuring advisor, whereby a table of claims and a
preliminary restructuring plan are drawn up.
Immediately after the institution of the proceedings, the
debtor sets the arrangement date, which must fall no
earlier than 3 months and no later than the day
immediately preceding the day on which the
application for approval of the arrangement is
submitted. The arrangement date set, the supervisor
makes an announcement in the National Debtor Register
(in contrast to the SRP, where the announcement was
made in Monitor Sądowy i Gospodarczy). Upon making
the announcement, any enforcement proceedings
pending against the business are suspended. Another
novelty introduced under the Amendment is the
requirement for the supervisor to establish and maintain
the records of the proceedings in an ICT system.
The next step is for the supervisor to hold a vote among
the creditors on the arrangement. The vote is taken via
an ICT system servicing the proceedings or at a meeting
of creditors convened by the supervisor specifically for
that purpose. Then the supervisor counts the votes and
confirms that the arrangement has been approved.
When that happens, as the last step of the process, the
debtor is required to file an application for approval
of the arrangement. Such an application may not be filed later than 4 months from the date on which the
announcement of the arrangement day has been made.
The application is examined by the competent court
and a decision is issued to approve or reject it. This is
the debtor’s only role in the entire arrangement
approval proceedings.
Thus, as becomes evident, the proceedings for approval
of the arrangement are an extremely informal process
that requires almost no involvement of the court. In
combination with the requirement for the proceedings
to be conducted by a professional advisor, this provides
a relatively simple and accessible method of handling
the restructuring, even for undertakings that may be
unfamiliar with this particular area of law. Thus, the
amendments made by the legislators must be seen as
positive, and the arrangement approval proceedings
will undoubtedly become a very popular legal tool
among debtors.
Disclaimer: This publication has been prepared for clients and professional associates of Miller Canfield. It is intended to provide only a summary of certain recent legal
developments of selected areas of law. For this reason the information contained in this publication should not form the basis of any decision as to a particular course of action;
nor should it be relied on as legal advice or regarded as a substitute for detailed advice in individual cases. The services of a competent professional adviser should be obtained
in each instance so that the applicability of the relevant legislation or other legal development to the particular facts can be verified.