SKP successfully represented its client in a long-running dispute concerning a guarantor’s liability for the obligations of an insolvent company whose creditors’ claims were covered by an arrangement providing for their conversion into shares.
 
Following favourable judgments by the courts of both instances, the Supreme Court, in its judgment of 20 May 2026, case no. II CSKP 96/26, dismissed the cassation complaint lodged against our client. The judgment is significant for restructuring practice because it clarifies the relationship between the effects of court approval of an arrangement providing for a debt-to-equity conversion, the registration of a share capital increase, and the extinguishment of the converted obligation.
 
The judgment is particularly important for restructuring practice because it clearly identifies the point at which a claim covered by an arrangement is effectively converted into shares in the insolvent company. The Supreme Court held that a final and binding court order approving an arrangement providing for such a conversion replaces the corporate actions normally required to effect an increase in share capital. It does not, however, replace the constitutive entry of the share capital increase in the Register of Entrepreneurs of the National Court Register (KRS).
 
Until that entry has been made, the conversion has not yet been completed and the claim covered by the arrangement has not been extinguished. The Supreme Court also expressly confirmed that the mere final and binding approval of the arrangement does not extinguish the guarantor’s liability. Since the principal obligation has not yet been definitively converted into shares and therefore remains in existence, the guarantor’s ancillary liability also continues.
 
The judgment enhances legal certainty for participants in restructuring proceedings and clarifies the relationship between the approval of an arrangement providing for a debt-to-equity conversion, the registration of a share capital increase, and the extinguishment of the converted obligation.
 
The judgment was issued on the basis of Article 294(3) of the Polish Bankruptcy Law, in the wording applicable before 1 January 2016. Under the current legal framework, an analogous function is performed by Article 169(3) and (4) of the Polish Restructuring Law. These provisions similarly provide that a final and binding court-approved arrangement replaces specified corporate actions and that a copy of the final and binding court order approving the arrangement constitutes the basis for registering a share capital increase in the Register of Entrepreneurs of the National Court Register (KRS). The statutory mechanism under Article 169 expressly provides both for the replacement of specified corporate actions and for the use of the court order as the basis for the relevant KRS entry.
 
On behalf of SKP, the matter was handled by attorney-at-law Tomasz Pieczyk and advocate Kamil Statuch.