Pre-packaged liquidation

(pre-pack)

Revolutionary way of acquiring

enterprises in crisis

tatara.com.pl

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

declare

bankruptcy and

to approve sale-

purchase

conditions

Conclusion of

the sale-

purchase

agreement

tatara.com.pl

• 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

agreement

• No bank procedures related to financing

pre-pack

• 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

tatara.com.pl