Client success! Two fraudulent conveyance claims dismissed with legal force.

Final judgments

In March 2024, the Court of Appeal in Warsaw issued two judgments in which it validly dismissed the bank’s appeals.

It held that the Creditor could not be said to have been wronged, because on the day the bank’s claim became due, the value of the items subject to the registered pledge was higher than the value of the claim.

The fact that the bank did not initiate enforcement for several years could not burden the debtor or third parties.

It also held that only the Creditor who had not exercised its rights could be held liable for the diminution in value of the pledged assets due to the tardiness of enforcement.

Lack of harm to the Creditor

The Court of Appeal held that the lack of harm to the Creditor means the absence of one of the prerequisites of a pauliaen complaint, i.e. awareness of harm.

It also drew attention to the Creditor’s conduct in the composition proceedings.

On the basis of Article 151(2) of the Restructuring Law, the Creditor did not agree to the inclusion in the arrangement of a claim secured by a pledge.

He chose the source from which he wished to satisfy himself, but nevertheless delayed exercising his rights.

Accordingly, the court held that the creditor’s claims that he could pursue a pauliacal claim did not merit consideration.

“The creditor’s behaviour in the arrangement procedure deserved to be emphasised in this respect.

Well, based on Article 151(2) of the Restructuring Law, he did not consent to the inclusion of the pledge-secured claim in the arrangement.

Arguably, he took such a decision in view of the state of the debtor’s remaining assets and the envisaged possibility to write off its claims to the extent of 85%.

The arrangement proceedings therefore did not include the plaintiff’s claim and the pledge, from which he had priority of satisfaction, and ended with a final decision on the execution of the arrangement.

At the same time, it appears that at the time of the disagreement, the claimant made a clear choice of the source from which it intended to satisfy itself, but nevertheless continued to delay the exercise of its pledge rights for unexplained reasons.

However, in the circumstances, his claims about the possibility of realising the pauliańska claim in terms of his choice of satisfaction” did not merit all the more.

The judgments are final and binding.

The case was conducted by:

• advocate
• Wojciech Bokina
• apl. Katarzyna Anioł-Michta.