Restructuring or bankruptcy? A board compass for a company in crisis
- #restructuring
- #bankruptcy
- #crisis
The first board conversation
When a company loses liquidity, the board has 30 days from the moment insolvency is established to choose a path: restructuring or bankruptcy. After that — board members face personal liability.
Four procedures — what to use, and when
Arrangement approval procedure (PZU) — the simplest. You negotiate informally with creditors; the court only approves the result. Works when there are few creditors and they're all open to talks. Timeline: 2–4 months.
Arrangement procedure — the court approves an arrangement voted on by creditors. Provides protection against enforcement. Works when the business is operationally healthy but suffers a temporary liquidity crunch. Timeline: 6–12 months.
Sanacja proceedings — the deepest restructuring. An administrator runs (or co-runs) the company. Use when you need a radical change of business model. Timeline: 12–24 months.
Bankruptcy — liquidation of assets by a trustee. Use when there's no realistic chance of saving the business in any form.
Decision map
| Situation | Recommendation |
|---|---|
| Short-term liquidity gap | PZU |
| Persistent issues but profitable business | Arrangement |
| Need for deep restructuring | Sanacja |
| No prospect of recovery | Bankruptcy |
| Creditors won't agree to an arrangement | Bankruptcy |
What you cannot delay
For late filing of a bankruptcy petition, board members are personally liable with all of their personal assets. Even after leaving the company. Even 5 years later.
ZUS and tax arrears: subsidiary liability of board members — without a ceiling.
Common board mistakes
- Waiting "until things settle". In a crisis, time works against you — creditors lose patience, banks cut credit lines.
- Resigning from the board in panic. Doesn't shield you from past liability. Often makes things worse (loss of control).
- Favouring some creditors — that's a criminal offence and seriously damages later proceedings.
- Taking on new obligations during the crisis — without a repayment plan, this can be treated as acting against creditors.
What to do next
Whichever path you take — the first 3 steps are the same:
- Prepare a same-day balance sheet with liquidation valuations.
- Build a creditor register with amounts and due dates.
- Consult an insolvency/restructuring lawyer (PrUp/PrR) and a financial advisor on procedure choice.
We advise on procedure selection and run the full proceedings together with insolvency and restructuring lawyers. The first conversation is confidential and free — usually 90 minutes is enough to see where you stand.