{"id":6032,"date":"2024-07-02T11:57:03","date_gmt":"2024-07-02T09:57:03","guid":{"rendered":"https:\/\/pmrsa.pl\/?p=2111"},"modified":"2025-05-31T07:23:27","modified_gmt":"2025-05-31T07:23:27","slug":"variation-proceedings-part-2","status":"publish","type":"post","link":"https:\/\/pmrsa.pl\/en\/variation-proceedings-part-2\/","title":{"rendered":"Proceedings for the modification of the arrangement Part 2"},"content":{"rendered":"

Second chance for your company<\/strong><\/p>\n\n\n\n

In May this year, an introductory article was published on the PMR Restructuring S.A. website on the issue of proceedings to amend the arrangement.<\/a><\/p>\n\n\n\n

The topics presented were of interest to you and revealed,<\/strong> that not all entrepreneurs who are in the process of implementing an arrangement adopted in restructuring proceedings are aware of the existence of such a solution and the possibilities and benefits it entails.<\/p>\n\n\n\n

A few words about the article - Listen<\/h4>\n\n\n\n

<\/p>\n\n\n\n

It should be borne in mind that the approved layout is not, however, the final construction, which means that these difficulties do not have to end in the realisation of the negative scenario indicated.<\/strong> Any entrepreneur who is currently executing an arrangement and whose income has decreased may submit an application<\/a> to open the procedure for its modification. Its purpose is to enable such a modification of the arrangement that will be feasible and will allow at least the preservation of the benefits developed under the original arrangement of benefits.<\/p>\n\n\n\n

The catalogue of possible directions of changes is very wide, the legislator has indicated several possibilities without limiting entrepreneurs in terms of methods debt restructuring<\/a>, but only defining the framework of their admissibility. <\/strong>The most intuitive, and also the most common in practice, proposals include postponing the date of execution of the existing arrangement, spreading the repayment into instalments, modifying the number of existing instalments, changing their amount or increasing redemption. It is worth noting that an amendment may comprise one or a combination of several of the proposed modalities, e.g. assume at the same time that repayment of the existing arrangement will be postponed for 12 months from the due date of a particular arrangement instalment, the amount of the outstanding debt under the arrangement will be reduced by an additional 20% and repaid in equal instalments, the number of which will be increased to the desired level.<\/em><\/p>\n\n\n\n

In progress changes to the system<\/a> a proposal is also possible within the framework,<\/strong> whose repayment of the arrangement will be taken over by a third party, or will be met from external financing on terms to be determined by them.<\/p>\n\n\n\n

In the case of limited companies, the conversion of receivables into shares is an interesting proposition, <\/strong>which causes an extremely beneficial change in the balance sheet structure, where the liability is converted into capital, causing an increase in the parameters required for assessing its financial condition. A solution worth considering, but requiring professional support, so if you are interested, it is worth using an experienced support by recommending the PMR Restructuring team here<\/a> SA, which has in its portfolio effective implementations of proposals based on conversion.<\/p>\n\n\n\n

A liquidation arrangement providing for satisfaction in a variation of the arrangement from the liquidation of the company's assets is also possible.<\/strong> The advantage of this solution is the prospect of obtaining significantly larger amounts to repay creditors than in bankruptcy or enforcement proceedings, because the sale is made on market terms without a discount appropriate for forced liquidation, and the amounts obtained are not reduced by the costs of enforcement by a bailiff or bankruptcy proceedings - and these in the case of economic bankruptcy<\/a> can be really high. Effective implementation of the liquidation agreement also has the advantage from the point of view of the company that it does not leave it with the "label" of bankrupt.<\/p>\n\n\n\n

As already indicated, the Law <\/strong>restructuring imposes certain limits on the freedom to construct proposals in the proceedings<\/a> to change the arrangement, among other things by specifying that the restructuring conditions are the same for all creditors, with the legislator allowing their division into groups that are then the same within the same group and giving preference to creditors providing financing during the implementation of the arrangement. In addition, the act imposes certain restrictions on the restructuring of the Social Insurance Institution's receivables, secured receivables, in terms of public aid received, or employee receivables.<\/p>\n\n\n\n

When analysing possible scenarios at each stage of the projection, it is important to bear in mind,<\/strong> that the arrangement proposals must anticipate the possibility of being accepted by a qualified majority of creditors, as well as correspond to the real possibility of fulfilling the obligations.<\/p>\n\n\n\n

To conclude, an important note<\/strong> \u2013 the above content is presented with the reservation \u201cas a rule\u201d, because it has been presented at a certain level of generality facilitating understanding of the essence, without going into the intricacies of exclusions and legal complexities. Restructuring proceedings, as well as proceedings for changing the arrangement, are a product made to measure<\/a>. The Act defines certain frameworks and a range of possibilities that the skilled restructuring advisor<\/a> can be tailored to individual situations and needs, which is why any decisions should be preceded by a consultation with a professional.<\/p>","protected":false},"excerpt":{"rendered":"

A Second Chance for Your Company. In May of this year, an introductory article on the topic of arrangement amendment proceedings was published on the PMR Restrukturyzacje SA website. The presented topic was met with interest and revealed that not all entrepreneurs currently executing an arrangement approved in restructuring proceedings are aware of the existence of such a solution and the opportunities and benefits it brings. A few words about the article - Listen. We should begin by explaining the consequences of delays in implementing an approved arrangement, which can crystallize even when the entrepreneur has only one arrears in paying the due arrangement installments. In such a case, the creditor and the arrangement supervisor, among others, have the option of filing a motion to set aside the arrangement. If the motion is approved, all benefits arising from it are lost, including the earned write-off, and all liabilities become immediately due, along with interest. It is important to remember that an approved arrangement is not a final structure, meaning that these difficulties do not necessarily result in the implementation of the negative scenario. Any entrepreneur currently executing an arrangement whose income has decreased may submit a motion to amend it. Its goal is to enable a modification of the arrangement that is feasible and will at least preserve the benefits achieved under the original arrangement. The list of possible modifications is very broad; the legislator has indicated several options without limiting entrepreneurs' debt restructuring methods, merely defining the framework for their admissibility. The most intuitive and most frequently encountered proposals include deferring the implementation of the existing arrangement, spreading repayment into installments, modifying the number of existing installments, changing their amounts, or increasing the write-off. It is worth noting that a change may include one or a combination of several of the proposed methods. For example, it may assume that repayment of the existing arrangement will be deferred for 12 months from the due date of a specific arrangement installment, the amount of the outstanding debt under the arrangement will be reduced by an additional 20% and repaid in equal installments, the number of which will be increased to the desired level. During the arrangement amendment process, it is also possible to propose a solution whereby repayment of the arrangement will be assumed by a third party or financed through external financing under terms specified by these entities. For companies, an interesting option is the conversion of receivables into shares or stocks, which results in an extremely favorable change in the balance sheet structure, where the liability is converted into equity, increasing the parameters needed to assess its financial condition. This solution is worth considering, but requires professional support. Therefore, if you are interested, it is worth seeking experienced support. We recommend the PMR Restrukturyzacje SA team, whose portfolio includes successful implementations of conversion-based proposals. A liquidation arrangement is also possible, providing for satisfaction of claims under the arrangement amendment through the liquidation of the company's assets. The advantage of this solution is the prospect of obtaining significantly larger amounts for repayment of creditors than in bankruptcy or enforcement proceedings, as the sale is conducted on market terms, without the discount inherent in forced liquidation, and the proceeds are not reduced by the costs of enforcement by a bailiff or bankruptcy proceedings \u2013 which can be very high in the case of commercial bankruptcy. Effective implementation of a liquidation arrangement also has the advantage of not leaving the company with the "label" of bankruptcy. As already indicated, the Restructuring Law imposes certain limits on the freedom of drafting proposals in the arrangement amendment proceedings, including by specifying that the restructuring terms are the same for all creditors, with the legislator permitting their division into groups, which are then identical within the same group, and by giving preference to creditors providing financing during the implementation of the arrangement. Furthermore, the Act imposes certain restrictions on the restructuring of Social Insurance Institution (ZUS) receivables, secured receivables, receivables related to public aid received, and employee receivables. When analyzing possible scenarios at each stage of the projection, it is important to remember that arrangement proposals should anticipate the possibility of acceptance by a qualified majority of creditors and reflect the realistic possibilities of fulfilling the obligations. Finally, an important note: the above content is presented with the caveat "in principle," as it is presented at a level of generality that facilitates understanding, without delving into the intricacies of exclusions and legal complexities. Restructuring proceedings, as well as proceedings to amend the arrangement, are tailor-made products. The Act defines a certain framework and a range of options that a skilled restructuring advisor can tailor to individual circumstances and needs. Therefore, it is advisable to consult a professional before making any decisions.<\/p>","protected":false},"author":14,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[19],"tags":[],"ppma_author":[33],"class_list":["post-6032","post","type-post","status-publish","format-standard","hentry","category-blog"],"authors":[{"term_id":33,"user_id":14,"is_guest":0,"slug":"m-zarownapmr-restructuring-pl","display_name":"Marta Zar\u00f3wna","avatar_url":{"url":"https:\/\/pmrsa.pl\/wp-content\/uploads\/2024\/09\/user03-1.jpg","url2x":"https:\/\/pmrsa.pl\/wp-content\/uploads\/2024\/09\/user03-1.jpg"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":"","8":""}],"_links":{"self":[{"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/posts\/6032","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/users\/14"}],"replies":[{"embeddable":true,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/comments?post=6032"}],"version-history":[{"count":0,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/posts\/6032\/revisions"}],"wp:attachment":[{"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/media?parent=6032"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/categories?post=6032"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/tags?post=6032"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/pmrsa.pl\/en\/wp-json\/wp\/v2\/ppma_author?post=6032"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}