Success! Thanks to the work of our team, the court dismissed the claim against the insolvency administrator

The Court of Appeal in Poznań dismissed the creditor’s claim against the former administrator of the restructuring estate for damages suffered as a result of his improper performance of his duties. These duties consisted in the administrator ordering services for an entity undergoing restructuring proceedings. The dispute concerns an important and precedent-setting issue regarding the scope of liability of entities performing functions within restructuring proceedings for the obligations of those entities.

The dispute in question is a consequence of the failure of the company, which is in sanitation proceedings, to satisfy on time its receivables for the delivery of services to a creditor from the fuel industry. Deliveries of goods to the company took place continuously for almost three years, and the non-payment referred to the last invoices in the amount of several hundred thousand zlotys. In the described period, already after the goods were ordered by the respondent administrator of the sanitation mass, there was a sudden collapse of the company’s financial situation related to the termination of key factoring agreements, contracts for electricity supply or costly repairs resulting from the breakdown of machines, which were the basis of the company’s production activity.

As a result of the evidence proceedings, the Court of Appeal in Poznań legally dismissed in its entirety the claim based on Article 25(2) of the Restructuring Law in conjunction with Article 415 of the Civil Code, i.e. on the tort liability regime. Notwithstanding the legal basis thus invoked, the attorney sought the administrator’s liability on as many as four grounds:

1. from tort,
2. in contract,
3. strict liability,
4. similar to the liability under section 299 of the Companies Act

The court of second instance ruled that the insolvency administrator could not be held liable on such grounds. The insolvency administrator cannot bear any liability other than tort liability. Consequently, in this particular case, no liability can be sought for the contractual obligations of a company undergoing restructuring if there is no causal link between its actions in pursuit of the objective of the restructuring proceedings (which must be culpable) and the damage.

Importantly, when assessing the conduct of the insolvency administrator, the Court of Appeal in Poznań emphasized that the standard of due diligence of the administrator should be viewed through the prism of the objectives of the insolvency proceedings, which, according to Article 3(5) and (6) of the Restructuring Law, is to enable the debtor to carry out insolvency measures (legal and factual actions aimed at improving the debtor’s economic situation and restoring the debtor’s ability to perform its obligations, while protecting it from enforcement) and concluding an arrangement after drawing up and approving a list of claims.

Another important issue in this dispute is the economic risk borne by a contractor who decides to cooperate with a company undergoing restructuring proceedings. By definition, the financial situation of such an entity is difficult, as it is indebted, which was known to the claimant company. Given the dynamic situation on the market, particularly affecting companies in the manufacturing sector, the lack of additional payment security and financing through trade credit appears to be reckless and “at one’s own risk.” The Court of Appeal pointed out that knowledge of the financial situation of a contractor may result not only from the obvious use of the note “under restructuring” or the disclosure of its financial documents, but also from direct conversations with the company’s employees or from observing the timeliness of the settlement of liabilities. Since the claimant took the risk of cooperating with an entity undergoing restructuring, it had to take into account that payments to it may be delayed or even remain unsatisfied in the event of a deterioration in the economic situation of the company undergoing restructuring.

Consequently, the Court of Appeal in Poznań ruled that the damage to the claimant’s assets did not result from the defendant’s failure to exercise due diligence in conducting the affairs of the company undergoing restructuring. During the period when the orders were placed, the defendant acted with due diligence aimed at improving the company’s economic situation and its ability to meet its obligations.

The client was represented by attorney Wojciech Bokina and attorney Paulina Sułkowska.

The judgment is final.