The relation between duration of insolvency proceedings and their efficiency (with a particular emphasis on Polish experiences)

• Date: 01 December 2020
• DOI: http://doi.org/10.1002/iir.1392
• Published date: 01 December 2020

RESEARCH ARTICLE

The relation between duration of insolvency

proceedings and their efficiency (with a

particular emphasis on Polish experiences)

Joanna Kruczalak-Jankowska

1

| Monika Ma

snicka

2

|

Anna Machnikowska

1

1

Faculty of Law and Administration, Gdansk University, Gdansk, Poland

2

ACURIA Project, Gdansk University, Gdansk, Poland

Correspondence

Joanna Kruczalak-Jankowska, Faculty of

Law and Administration, Gdansk

University, Poland.

Email: joanna.kruczalak-jankowska@ug.

edu.pl

Abstract

The following article addresses the issue of the duration

of insolvency proceedings (both winding-up and reorga-

nization) and its influence on the efficiency of the pro-

ceedings. The previous opinion presented in the

literature, according to which shorter and cheaper

insolvency proceedings contribute to establishing enter-

prises, has been recently reflected in a Directive of the

European Parliament and of the Council on preventive

restructuring frameworks. It expressly states that the

excessive length of restructuring, insolvency and dis-

charge procedures is an important factor triggering low

recovery rates and deterring investors from doing busi-

ness in jurisdictions where procedures risk taking too

long and being too costly. It was also pointed out that

reducing the length of restructuring procedures would

result in higher recovery rates for creditors as the pass-

ing of time would normally only result in a further loss

of value for the enterprise. Moreover, to promote effi-

ciency and reduce delays and costs, the EU Directive

recommends introducing flexible preventive res-

tructuring frameworks. The research carried out within

the ACURIA project, particularly interviews, allows us

Received: 6 December 2019 Revised: 3 August 2020 Accepted: 6 August 2020

DOI: 10.1002/iir.1392

© 2020 INSOL International and John Wiley & Sons Ltd

Int Insolv Rev. 2020;29:379–392. wileyonlinelibrary.com/journal/iir 379