Tenant in Restructuring – What Does the Law Say?
The entrepreneur facing mounting debt first worries about losing the premises. Meanwhile, the provisions of restructuring law provide mechanisms that allow the termination of lease agreements to be blocked.
According to Article 256(1), the lessor does not have the right to terminate the lease agreement from the day the restructuring proceedings are opened. At this stage, real protection of the company against bankruptcy begins, because maintaining the premises preserves business continuity and a source of income.
Restructuring and the Bailiff – What Happens to Enforcement?
It is worth knowing that restructuring proceedings not only protect against termination of agreements but also, at a later stage – when the debt is in enforcement. The relationship between restructuring and the bailiff is regulated in Article 312 of the Act.
The provision states that at the moment of opening restructuring proceedings:
- The enforcement proceedings directed at the debtor’s assets that are part of the restructuring mass, which were initiated before the day the restructuring proceedings were opened, are suspended by operation of law from the day the proceedings are opened. At the debtor’s or manager’s request, the judge-commissioner declares the suspension of the enforcement proceedings by order. The order is also served to the enforcement authority.
- The judge-commissioner, at the debtor’s or manager’s request, may lift the seizure made before the day the restructuring proceedings were opened in the enforcement or protective proceedings directed at the debtor’s assets that are part of the restructuring mass, if it is necessary for the continued operation of the enterprise. The rule of paragraph 1, sentence three applies accordingly.
- 3.The sums obtained in the suspended enforcement proceedings, and still not paid, are transferred to the restructuring mass immediately after the issuance of the decision to open the restructuring proceedings.
- Directing enforcement to the debtor’s assets that are part of the restructuring mass and executing the decision to secure the claim or ordering the securing of the claim on that property is inadmissible after the day the restructuring proceedings are opened.
This means that the bailiff cannot take any actions, and the entrepreneur gains time to organize the company’s financial situation.
What Does the Suspension of Bailiff Enforcement Entail?
Another advantage of restructuring is the suspension of bailiff enforcement. Enforcement is halted, and for the entrepreneur it is a breath of relief, because the freed funds can be allocated to the ongoing operation of the business.
Therefore, the suspension of bailiff enforcement is not only a beneficial solution in itself but also an element of protecting the company from bankruptcy. Thanks to this, the enterprise can continue generating revenue and gradually get back on track.
Protecting the Company from Bankruptcy – Why Quick Action Matters?
Mounting debt and the threat of losing the premises are alarm signals that cannot be ignored. Rapid implementation of restructuring proceedings can bring very concrete results. It enables actions that allow the termination of lease agreements to be blocked, thereby securing the premises that are the foundation of the business. Losing the headquarters, store or production hall often causes an immediate drop in revenue, and consequently accelerates bankruptcy.
Moreover, restructuring proceedings mean the suspension of new enforcement and the suspension of bailiff enforcement – the company regains the ability to settle current obligations.
When to Seek Help to Block Termination of Lease Agreements?
The timing of the reaction matters. The first payment demands, the signal of intent to terminate the agreement or the initiation of enforcement should prompt immediate action. At this stage, it is still possible to effectively block the termination of lease agreements and activate other procedures that protect the company from bankruptcy.
In summary – early use of professional legal support increases the likelihood that the company can be guided through the crisis without having to declare bankruptcy.
