Bankruptcy of a Polish company's German shareholder – key aspects

Bankruptcy of a parent company may force the Polish daughter company to declare bankruptcy as well. Among other things, this protects the management board from personal and private liability for the company’s obligations. An in-depth analysis of the company’s financial standing and the existing financing sources is necessary in such a case.

A bankruptcy declaration in Germany may require steps to secure claims against the parent company. It is imperative to remember to put the claims on the list of claims and find out if the contracts with the Polish company will be continued and to what extent. The key for the Polish company is the parent’s ability to pay for the goods or services supplied on an on-going basis. This often affects directly the financial liquidity of the daughter company. 

It is worthwhile thinking about safeguards even before the bankruptcy. Unfortunately, bankruptcy law sets out periods when such safeguards in dealings with associated enterprises are ineffective. However, these are important issues that should be considered in the design of the mutual terms of business. It is also important to review German laws to make sure that the safeguards are effective under those laws too.

Our law firm hires experts in German and Polish bankruptcy laws. We support clients at every stage of proceedings in Germany and in Poland. You are welcome to contact our attorneys at law.