The regulated profession of Licensed Restructuring Adviser in Poland
At the beginning of 2016 a new regulated profession of “Restructuring Adviser” was created. The role is to be performed by persons professionally qualified for position of office holder in restructuring and bankruptcy proceedings. Restructuring Advisers are required to have knowledge of law, economics, finance and management. Their professional qualifications are confirmed by licence. Currently over 1,050 professionals hold a Restructuring Adviser licence in Poland.
Licensed Restructuring Advisers are governed by Bankruptcy Act 2003 and Restructuring Act 2015. Each person holding a Restructuring Adviser licence is exclusively authorised to act as:
- Arrangement supervisor (nadzorca układu), court supervisor (nadzorca sądowy) and administrator (zarządca) appointed for a debtor in restructuring proceedings;
- Official receiver of the bankruptcy estate (syndyk) appointed for the bankrupt in bankruptcy proceedings;
- Temporary court supervisor (tymczasowy nadzorca sądowy), temporary administrator (tymczasowy zarządca) or compulsory administrator (zarządca przymusowy) appointed in proceedings aimed at opening restructuring or bankruptcy, as security for the debtor’s assets until determination of the application to open proceedings.
In bankruptcy proceedings of insurance and reinsurance companies, apart from holding a licence of Restructuring Adviser, the official receiver should also have knowledge of the organisation and operations of insurance or reinsurance companies. Exceptionally, an official receiver can be another insurance or reinsurance company. This also applies to bankruptcy proceedings of banks and credit unions, where the official receiver can also be – respectively – another bank or credit union.
The rules and procedure for obtaining a licence by a Licensed Restructuring Adviser are determined in the Restructuring Adviser’s Licence Act 2007. The licence is granted by the Minister of Justice for an indefinite term. The Minister of Justice maintains a publicly available list of Licensed Restructuring Advisers.
A natural person who jointly fulfils the following requirements may apply for a Restructuring Adviser licence:
- Is a citizen of the EU Member State, Switzerland or Member State of the European Free Trade Association – party to the agreement on the European Economic Area;
- Has graduated from university with a masters’ degree or equivalent in the country referred to above. In practice, persons applying for a Restructuring Adviser licence are usually graduated in law, economics or management;
- He or she speaks Polish to the extent necessary to perform duties of an office holder;
- Has passed the state examination before the Examination Commission, appointed by the Minister of Justice. The examination includes issues on law, economics, finances and management, with particular regard for specifics of restructuring and bankruptcy;
- Within 15 years before applying for a Restructuring Adviser licence he/she has for at least 3 years administered a bankrupt’s estate, enterprise or its separated part in Poland or in a country referred to above;
- Has full capacity to perform legal actions;
- Has an impeccable reputation;
- Has neither been convicted of a crime or fiscal crime nor is suspected of or charged with an offence investigated ex officio or fiscal crime;
- Is not entered into the register of insolvent debtors at the National Court Register.
Licensed Restructuring Advisers are obliged to pursue continuous education to raise their qualifications and professional skills.
The debtor selects the arrangement supervisor in postępowanie o zatwierdzenie układu (proceeding for approval of arrangement), which is an out-of-court restructuring procedure. Creditors do not have a formal possibility to influence the selection and change of the arrangement supervisor. Only the debtor can do so. This gives the debtor the freedom to select an arrangement supervisor from among the Licensed Restructuring Advisers operating on the market.
The court appoints the court supervisor, administrator and official receiver in in-court restructuring proceedings (i.e. przyspieszone postępowanie układowe – accelerated arrangement proceedings, postępowanie układowe – standard arrangement proceedings and postępowanie sanacyjne – remedial proceedings) and in bankruptcy proceedings. In principle, the court chooses the office holder. This also concerns persons appointed as temporary court supervisor, temporary administrator and compulsory administrator.
In bankruptcy proceedings of banks and credit unions the court is required to consult a candidate for official receiver with the Financial Supervision Authority, the chairman and other members of the last bank or credit unions management board or commissioned administration or the liquidator of bank or credit unions. In case of proceedings concerning the financial entity being a subsidiary of the State Treasury, the court shall consult also with the Minister of State Treasury. These apply also to the appointment of the administrator in the in-court restructuring proceedings of banks and credit unions.
In bankruptcy proceedings of insurance and reinsurance companies the court is required to consult a candidate for official receiver with the Financial Supervision Authority.
The debtor, in co-operation with the creditor or group of creditors who jointly hold more than 30% of debtor’s debts (with the exception of certain creditors specified in law), may in the application to open in-court restructuring apply for a specific person to be appointed as court supervisor or administrator. The court is then bound by the debtor’s application, unless justified reasons arise. The court should also appoint a person indicated in the debtor’s application as a temporary court supervisor, temporary administrator or compulsory administrator.
In the course of the in-court restructuring and bankruptcy proceedings, the creditors’ council may adopt a resolution to change the office holder and appoint another Licensed Restructuring Adviser at the office. The court is bound by the creditors’ council resolution, unless this is contrary to law, flagrantly breaches creditors’ interests or a justified presumption arises that the specified person will not properly perform his/her duties. The court supervisor and administrator appointed at a creditors’ council initiative cannot be removed from office at the debtor’s request.
The Minister of Justice supervises Licensed Restructuring Advisers. The Minister has the right to withdraw licence and suspend rights ensuing therefrom in situations specified in the law, in particular if they flagrantly breach their duties.
In turn, in in-court restructuring and bankruptcy proceedings, the judge-commissioner supervises the actions of Licensed Restructuring Adviser appointed as the office holder and points out any violations committed by them during the proceedings. The judge-commissioner is authorised to reprimand and fine them. The judge-commissioner also indicates those actions which are not permitted by the office holder without his/her or creditors’ council consent. The actions of Licensed Restructuring Adviser appointed as the office holder are also subject in these proceedings to audit by the creditors’ council which may demand explanations from this person, and also present the judge-commissioner with observations concerning his or her activity. Each creditor may also draw the judge-commissioner or creditors’ council attention to the breaches of the office holder duties. The judge-commissioner and creditors’ council may then summons the office holder to provide explanations.
The court supervises activities of a Licensed Restructuring Adviser appointed as a temporary court supervisor, temporary administrator and compulsory administrator.
The remuneration of arrangement supervisor for participating in postępowanie o zatwierdzenie układu is agreed contractually with the debtor. The law does not specify any upper limits. The court’s approval is not required and there is no formal procedure allowing a creditor to appeal the remuneration amount.
The court decides on the court supervisor or administrator’s remuneration upon their application. The court supervisor and the administrator may attach a written creditors’ or creditors’ council opinion, with their position on the remuneration amount. These opinions are not binding on the court. The court’s decision concerning the determination of the final remuneration may be appealed by each of the creditors.
The court supervisor’s remuneration may currently range from around PLN 8,200 (twice the basic rate) for the simplest in-court restructuring cases to around PLN 180,000 (forty-four times the basic rate) for the most difficult. It is fixed as the sum of four parts, dependent on various factors specified in the law (e.g. number of creditors).
The administrator’s remuneration is fixed as the sum of five statutorily defined parts (e.g. average monthly turnover achieved), within the limits – from around PLN 12,250 (three times the basic rate) for the simplest in-court restructuring cases to around PLN 848,650 (two hundred and eight times the basic rate) for the most difficult cases.
The administrator’s remuneration may also be determined by the creditors’ meeting. The remuneration amount thus determined cannot be lower than the statutory limit. On the other hand, the debtor’s separate consent is required if this amount exceeds 150% of the statutory limit. Each creditor can appeal the decision of the creditors’ meeting on remuneration. In the event of a failure to accept the arrangement or final refusal to approve the arrangement, the creditors’ meeting resolution fixing the administrator’s remuneration becomes invalid.
The official receiver’s remuneration may currently range from around PLN 8,200 (twice the basic rate) for the simplest bankruptcy cases to approximately PLN 1,060,000 (two hundred and sixty times the basic rate) for the most difficult. It is determined as the sum of five parts dependent on various factors specified in the law (e.g. sum repaid to the creditors). The court decides on the official receiver’s remuneration. The court’s decision regarding determination of the final remuneration may be appealed by each creditor.
The court determines the remuneration of the temporary court supervisor, temporary administrator and compulsory administrator. Remuneration may currently range from around PLN 1,020 (one quarter of the basic rate) to around PLN 16,320 (four times the basic rate). The court decides on the remuneration upon the application of the office holder. The bankruptcy court’s decision can be appealed by the creditor participating in the proceedings. This does not apply to the decision of the restructuring court.
The Licensed Restructuring Adviser’s profession is regulated by Bankruptcy Act 2003, Restructuring Act 2015 and Restructuring Adviser’s Licence Act 2007.
Persons holding a Restructuring Adviser licence are not obliged to belong to any self-governing body. The most popular professional organization of Restructuring Advisers is the National Chamber of Restructuring Advisers. Members are obliged to comply with the rules contained in the Code of Ethics of Restructuring Advisers. This contains a set of rules regulating, in particular, the rules on conducting the profession, observing professional secrecy and the Restructuring Adviser’s relationship with the court, public authorities and other Restructuring Advisers.
From the beginning of 2016 Licensed Restructuring Advisers may also be appointed as an attorney in restructuring and bankruptcy proceedings and provide commercial services in restructuring and insolvency matters.
Karol Czepukojć, Restructuring and Bankruptcy practice group, Wardyński & Partners
This article first appeared in the 2017 INSOL Directory as part of a larger collective work entitled “Insolvency Practitioners – Qualifications and Appointments Around the World”, published by INSOL International in December 2016.