Pre-packaged liquidation
Revolutionary way of acquiring
enterprises in crisis
Pre-pack is a new procedure in Polish Bankruptcy Law, allowing to
acquire enterprise as a whole or going concern of the debtor within 4
steps without auction
Finding investor nonaffiliated with the debtor to acquire:
a)enterprise as a whole or
b)going concern (GC) or
c)important assets of the debtor’s enterprise
The motion may be lodged by the debtor or personal creditor and should consist of at least the
price and buyer’s name (there is a possibility of attaching draft sell-purchase agreement),
together with expert’s valuation
The valuation should include discount because of not-including possible costs of regular
insolvency proceedings
The Temporary Court Supervisor verifies the valuation attached to the motion
The Bankruptcy Court declares insolvency and approves sale-purchase conditions (one decision)
The Court’s decision is published in the Court and Business Gazette (MSiG) and may be appealed
by the creditors within 7 days from the publication
The sale-purchase agreement should be concluded within 30 days from Court’s final decision
In the meantime it is possible to conclude lease agreement or cooperation agreement related
to use of sale-purchase subject
Limited legal and financial due diligence
Choice of an expert to value enterprise – in cooperation with the investor
Valuation should include discount because of quick sale-purchase
Finding investor
Due diligence
and valuation of
the enterprise
Motion to
bankruptcy and
to approve sale-
Conclusion of
the sale-
Quickness of the process (In practice, the
whole process of acquiring enterprise may
take from app. 4 to 8 months (in case of
appealing Court’s decision) from lodging
complete motion)
No old liabilities (execution sale)
Deleting secured claims (no old mortgage,
pledge, registered pledge, tax lien or
maritime mortgage)
The possibility to choose an expert
Acquisition of enterprise as a going concern
No auction
Limited due diligence by the investor
The necessity of issuing the whole price
before conclusion of the sale-purchase
No bank procedures related to financing
The risk of appealing the Court’s decision
by the creditors or lodging by the Trustee
(insolvency practitioner) motion to repeal
or change the Court’s decision
Pre-pack allows quick sale-purchase maintaining business
continuity and liberation from liabilities and secured claims