The purpose of the restructuring procedure is to avoid the debtor’s bankruptcy by enabling the restructuring by concluding an arrangement with creditors or by carrying out remedial measures, while securing the legitimate rights of creditors. As a rule, restructuring proceedings are initiated upon a restructuring application submitted by the debtor. The other grounds for opening the restructuring procedure are:

  1. Multiple creditors.
  2. The debtor’s restructuring capacity. The restructuring capacity is possessed by debtors who are entrepreneurs within the meaning of the Civil Code and:
  3. limited liability companies and joint-stock companies that do not conduct business activity;
  4. partners in personal commercial companies, who are liable for the company’s obligations without limitation with all their assets;
  5. partners of a partner company.

The restructuring law does not apply to a specific group of entities. It includes the State Treasury, local government units, domestic banks and other entities (Article 4 (2) of the RL).

  1. The debtor’s insolvency. Restructuring proceedings are carried out in relation to a debtor who has become insolvent – within the meaning of the Bankruptcy Law. The first condition for declaring a debtor insolvent is the loss of the ability to meet its due pecuniary obligations (it is assumed that the debtor has lost this ability if the delay in performing pecuniary obligations exceeds three months).

The second condition for recognizing a debtor who is a legal person or an organizational unit without legal personality, which has been granted legal capacity by a separate act, is a situation where his pecuniary obligations exceed the value of his property, and this state continues for a period exceeding twenty-four months (pecuniary obligations of the debtor exceed the value of his property if, according to the balance sheet, his liabilities, excluding provisions for liabilities and liabilities to related entities, exceed the value of his assets, and this condition persists for a period exceeding twenty-four months).

  1. Threat of insolvency. A debtor at risk of insolvency is a debtor whose economic situation indicates that it may soon become insolvent.
  2. The procedure may be conducted in the case of:
  3. proceedings for approval of the arrangement – when the sum of disputed claims entitling to vote on the arrangement does not exceed 15% of the sum of liabilities entitling to vote on the arrangement,

b.accelerated arrangement proceedings – when the sum of disputed claims entitling to vote on the arrangement does not exceed 15% of the sum of claims entitling to voting on the arrangement,

  1. arrangement proceedings – when the sum of disputed claims entitling to vote on the arrangement exceeds 15% of the sum of claims entitling to vote on the arrangement.

Negative grounds for opening the restructuring procedure:

  1. Harm to creditors as a result of restructuring proceedings.
  2. The court also refuses to open composition or remedial proceedings also if the debtor’s ability to meet the costs of the proceedings and liabilities arising after its opening has not been substantiated.