Business restructuring based on Restructuring Law

As of January 2016 the Restructuring Law became effective. Pursuant to that Law businesses may conduct restructuring without the need to file a bankruptcy petition. This Law is mostly targeted at entities that have become or might become insolvent but have rational arguments enabling them to recover by making arrangements with their creditors.

Pursuant to the Restructuring Law, the restructuring might be conducted based on the following procedures:

Arrangement approval procedure – the least complicated restructuring procedure, allowing the Debtor to develop a Restructuring Program and arrangement proposals on their own and obtain approvals of such proposals from Company Creditors. If the arrangement proposals are effectively voted through, they are approved by a licensed Restructuring Advisor that files a motion of arrangement approval to Court. There is no protection against law enforcement measures undertaken by Creditors for the time when the Restructuring Program is developed and the arrangement proposals are voted.
Simplified arrangement procedure – a procedure that might be implemented when the disputable liabilities do not exceed 15% of total liabilities covered by the arrangement. Once the restructuring proceedings are initiated by Court, the Debtor might be protected against law enforcement measures undertaken by Creditors covered by the arrangement. In case of Creditors that are not covered by the arrangements, law enforcement measures might be undertaken solely from the securities they were granted. When the proceedings are initiated, the Court appoints a Court Supervisor that is supposed to develop a Restructuring Program together with the Company and eventually – arrangement proposals for Creditors covered by the arrangements.
Arrangement procedure – a procedure for Debtors whose disputable liabilities exceed 15% of total liabilities covered by the arrangements. Other rules of conducting such proceedings are similar to the simplified arrangement procedure described above.
Recovery procedure – the fullest restructuring procedure providing Debtor’s protection against actions of all their Creditors, but temporarily taking away the power to control the Debtor’s Management Board. For that time the Court appoints a Receiver that will take any decisions regarding current operation of Company and develop a Restructuring Program and arrangement proposals.

Restructuring proceedings are conducted by licensed Restructuring Advisors that are appointed by the Court for the position of Court Supervisors or Receivers when the restructuring petition is prepared (depending on what kind of procedure is applied).

Within the MGW Group, the restructuring proceedings are conducted by its subsidiary MGW Doradca Restrukturyzacyjny Sp. z o.o. Its authorities hold a license of a Restructuring Advisor issued by the Minister of Justice.

MGW’s effectiveness in conducting restructuring proceedings is also due to the fact that MGW resources include many specialists supporting the Restructuring Advisor and the restructured Company to create assumptions of the Restructuring Program and planning steps necessary for the Company to recover. Those specialists include: