The Position of an Equity Holder in the Company’s Restructuring Proceedings Under the Polish Restructuring Law and the Directive on Preventive Restructuring

Abstract

The obligation to transpose the Preventive Restructuring Directive encourages discussion on the position of an equity holder in the company’s restructuring proceedings. The assumptions of the Polish restructuring procedure do not ipso jure grant equity holders the status of a participant in the proceedings. The Directive recognizes the risk of gross prejudice to the rights of equity holders, entitling the EU Member States to grant them the status of participants in the proceedings. Currently, equity holders’ mute position means that they are not able to effectively oppose restructuring actions that are to the detriment of their share rights, especially when creditors seek a hostile takeover of the company. De lege lata, the restructuring law gives equity holders almost no defense tools against a hostile takeover of the company as part of the debt-for-equity conversion.