In the context of German restructuring, bridge loans (Überbrückungskredite) are loans that are granted to financially distressed companies until a restructuring plan is formulated in order to avoid the company’s insolvency. In most cases, such loans are granted for a limited timeframe. After the restructuring plan has been finalized, renegotiations are usually required, in particular between the company, the lender and the company’s other creditors.
On 5 April 2017, an amendment to the German Insolvency Code (Insolvenzordnung – “InsO”) has come into force which provides for various changes to the avoidance rules and clawback laws in German insolvency proceedings.
The major change affects the right of an insolvency administrator to challenge transactions for willful disadvantage (§ 133 InsO).
Before Polish insolvency law was significantly amended in January 2016, restructurings were extremely rare, with corporate insolvencies ending in liquidation in more than 90% of all cases. At that point, the number of insolvencies ending in the liquidation of the debtor’s assets significantly exceeded successful restructurings – the focus had been mainly on satisfying the creditors – and allowing the debtor to continue his business was not a major priority for the legislator and the courts.
One of the many questions asked by our clients is: “Does Polish law recognise the concept of ‘piercing the corporate veil?’” Is it possible to disregard the separate legal personality of a company or corporation and make shareholders liable for the debts of the company? This question has been asked since the introduction of the market economy in Poland (in 1989) and there is still no clear answer.
The coronavirus pandemic poses new risks and challenges for business at a scale unknown before. In order to assist businesses, the Polish government has announced that a PLN 212 bn ($53bn) stimulus package will be put in place. For a summary see our previous post. Start up of the aid package will take time, and the shape of further aid to come is as yet unknown.
With respect to the dynamic course of events regarding the coronavirus disease 2019 (COVID-19), commonly known as the "coronavirus", we address the threat of insolvency of Polish companies and related liability of the statutory bodies (management board members), and provide a list of practical mitigating steps.
Insolvency Test of Your Company
Pursuant to the Polish bankruptcy law, the company is insolvent if: a. It is not able to pay its liabilities when they fall due and if the
On April 9, 2020, the Polish Sejm (lower House of Parliament) passed the Act on special support instruments with regard to the spread of SARS-CoV-2 virus and COVID-19 disease caused by it (the so-called Shield 2.0), featuring much anticipated changes to the deadlines for filing for bankruptcy.
On April 9, 2015, the lower house of the Polish parliament adopted a new Restructuring Law. The main goal of the new law is to introduce an effective mechanism to restructure a debtor’s business and prevent its liquidation. Generally, the continuation of a business is more favorable to creditors, it preserves jobs and allows the uninterrupted execution of contracts.
On 5 August 2015, the President of the Republic of Poland signed an amendment to the Act of 29 August 1997 on Covered Bonds and Mortgage Banks and related laws (the “Amendment”). These new changes will come into force on 1 January 2016.
Poland’s Parliament has enacted a new law creating a Borrowers’ Support Fund to help homeowners with mortgages that are underwater. Official statistics by mortgage amount show that 24.3% of mortgages, totaling PLN 84.1 billion (approx. USD 22.7 billion) exceed the value of the borrowers’ homes, affecting 236,400 borrowers.