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Scientists and delegates of business security institutions attended a high-profile conference hosted by Polish Market. The following are some excerpts of their reports prepared by Henryka Kopacz.

Professor
Andrzej Jakubecki,
Maria Curie-Skłodowska University in Lublin,
co-author of the Law
on Bankruptcy
and Rehabilitation
Bankruptcy is inseparable from free-market economy. Why is the institution of bankruptcy co closely tied to the free market? First of all, because of its main function, which is always protective. At all times the main aim of bankruptcy declarations is protecting the creditors of debtors who have fallen into financial straits. Also, bankruptcy helps eliminate players who have lost the ability to carry on their business from the market.
The currently binding Law on Bankruptcy and Rehabilitation came in force in 2003. Its practical enforcement clearly shows that many regulations need to be amended, both in procedure and content. Work on upgrading the act began two years ago and continued throughout the last parliament’s shortened term. Now the amendment process will have to be restarted under the new parliament. Perhaps this is a good thing, as the rehabilitation rulings call for changes that will make them more than just empty laws. In preparing the amendments the legislators decided that bankruptcy legislation should strive for the maximum satisfaction of creditors, and should work quickly to guarantee the security of business relations. This law will benefit creditors provided they participate in bankruptcy procedures from the filing phase and report their dues. This law bases on the principle that laws are for the active.

Przemysław Kurzawa, deputy head of the Department for Courts
of General Jurisdiction
at the Justice Ministry
In my belief the image of the judiciary, and of justice in general, depends to a large degree on how effective courts are in bankruptcy cases. For this reason the Justice Ministry attaches great importance to procedural efficiency in corporate registration and bankruptcy proceedings.
It must be remembered that bankruptcy laws are very complex and cover an unusually broad area, therefore judges who rule in bankruptcy cases must really possess a lot of knowledge, often in areas beyond court procedures. This is because bankruptcy cases reflect all the problems with which a bankrupt enterpriser had to cope with before he fell into financial trouble.
At the moment there are 220 bankruptcy judges in Poland. Bankruptcy proceedings take place in District Courts. Poland’s District Courts operate 47 Commercial Sections, of which sixteen specialize in bankruptcy trials. A total of 1,381 bankruptcy cases were filed and 461 bankruptcy rulings passed in the first half of this year. The vast majority of bankruptcy cases last under three years, those that take longer are monitored by the Justice Ministry.
The Justice Ministry does a lot to speed up and improve bankruptcy proceedings, among others by striving to free judges from numerous additional duties. With this in mind, 60 assistants have been enrolled to help our 220 bankruptcy judges. This is still insufficient, and our current aim is for every judge with around 20 cases on his or her agenda to have an assistant.

Krzysztof Kuniewicz, President, Bibby Factors Polska Sp. z o.o.
The term “factoring” in Poland covers a rather broad range of services. Most generally, factoring services involve coverage of debts resulting from commercial activity by banks or independent factors. Factoring is frequently confused with credit, but in fact both differ widely. In factoring enterprisers are offered a number of services creditors do not offer, like checks on partners, help in documenting debts, and debt monitoring.
An important security element in factoring is the easy accessibility of funding and the speed with which it takes place. This reduces the risk of delinquencies. Companies in need of sound debt and asset management should resort to factoring as an instrument effectively cutting down the danger of fluency holdups. From our practice at Bibby Factors Polska I can say that often firms come to us too late, at a stage where helping them is no longer easy.

Jerzy Dąbrowski, Raiffeisen Bank Polska
Surveys carried out by Raiffeisen Bank Polska show that bank clients increasingly resort to factoring instead of traditional credit. This is primarily because factoring offers longer repayment deadlines, which is a substantial advantage on the financial market. Secondly, factoring helps improve company finances, allows companies to boost
business without investing their own funds. Also, factoring lines extend over longer periods than credit lines, which allows enterprisers to launch and finance larger projects with more ease.
In our customers’ opinion the added-value services offered by factoring, like debt management, debt monitoring and debt collection, and the fact that factors take over responsibility for debtor insolvency, make factoring a very useful instrument for enterprisers.