Better to file petition to enforce claim before the debtor is declared bankrupt
Sometimes creditors put off commencing an action to enforce a claim when it could worsen the debtor’s financial position. As a result, they must wait until the bankruptcy proceeding is over before filing suit.
On 8 June 2010 the Polish Constitutional Tribunal ruled on a certified question presented by the District Court for Warsaw-Śródmieście, Labour and Social Insurance Division, concerning the scope of legal protection of a creditor in a bankruptcy proceeding. The district court asked whether Art. 62 and Art. 169 of the former Bankruptcy Law of 1934 is consistent with Art. 32 of the Polish Constitution insofar as it prevented a creditor from commencing a lawsuit against the debtor to enforce a claim subject to filing against the bankruptcy estate, where the creditor did not bring suit prior to declaration of bankruptcy and the claim was not allowed in the bankruptcy proceeding.
A man named Dariusz was employed as the CEO of a company. After the company was declared bankrupt, he filed a claim with the bankruptcy trustee for a portion of his salary. The judge-commissioner confirmed the list of creditors, recognising the CEO’s claim in the first category. The order was appealed, and the commercial court refused to recognise Dariusz’s claim in the first category.
The provisions in question, Art. 62 and Art. 169 of the former Bankruptcy Law, provided that during the course of a pending bankruptcy proceeding, creditors who did not commence an action prior to declaration of bankruptcy may enforce claims that are subject to filing against the bankruptcy estate only by submitting a proof of claim for inclusion in the list of creditors. If their claims were not recognised, they had to wait until the end of the bankruptcy proceeding before commencing an action against the debtor. However, in the case of creditors who did commence an action prior to declaration of bankruptcy, if their claims were not recognised in the list of creditors, they could take up their suspended lawsuit and, if the lawsuit were successful they could then have the list of creditors amended to include their claim.
The district court did not think there were sufficient grounds to give a privileged position to a creditor who filed an action prior to declaration of bankruptcy. Not all creditors could anticipate when bankruptcy might be declared. Their failure to act prior to declaration of bankruptcy might have been motivated by a desire to avoid worsening the financial condition of the debtor, or the need to wait until the claim became due and payable. Thus the court inquired whether these provisions of the former Bankruptcy Law were consistent with the constitutional principle of equality.
The Constitutional Tribunal held that Art. 62 in connection with Art. 169 of the Bankruptcy Law of 1934 was consistent with Art. 32(1) in connection with Art. 45(1) of the Constitution. The holding is final and will be published in the Journal of Laws.