Establishing the invalidity of a fraudulent agreement as an alternative to ruling it ineffective under Civil Code Art. 59
26.08.2022 protection of contracts, creditor protection
A year has passed since a counterparty entered into an agreement with a third party preventing actual performance of a contract previously entered into with the counterparty. Thus the one-year time limit under Art. 59 of the Polish Civil Code has already expired. Is there still any chance to eliminate from legal circulation a fraudulent transaction that harms the creditor?
A debtor disposes of assets before the debt falls due: Can the creditor pursue a fraudulent transfer claim against a third party?
26.08.2022 Actio pauliana, creditor protection
An investor and a contractor sign a construction contract. Before the contractor begins work, the investor disposes of valuable assets, from which the contractor could satisfy its claim for the fee, but the fee will not be due until completion of the work. In that situation, can the contractor take advantage of the broad protection of a fraudulent transfer claim against a third party?
Creditor Protection—a new vortal
30.06.2022 creditor protection
With creditors in mind, we have launched a new special-interest service on our website, Creditor Protection, devoted entirely to what creditors can do when debtors unlawfully evade payment of their debts or performance of other obligations.
When a debtor dies or inherits, what can a creditor do to determine what is in the estate?
30.06.2022 creditors in inheritance proceedings, creditor protection
One problem that can affect a creditor is the debtor’s death. Then a creditor seeking to recover a claim must in some way determine as soon as possible the value of the estate left by the deceased debtor, whether the claim is included in the estate, and who, from the group of potential heirs, and to what extent, will be responsible for the debtor’s obligations.
When the other party seeks to prevent performance of a contract
30.06.2022 protection of contracts, creditor protection
After conclusion of a preliminary agreement for sale or long-term tenancy of real estate, the owner refuses to conclude the final agreement, instead selling the property to another buyer or delivering the property to another tenant. Or imagine a contract for future delivery of rare, hard-to-find components essential for manufacturing, where the seller then enters into another contract promising to supply a direct competitor, preventing the supply to the original buyer. In such situations, does the original buyer have a claim other than for monetary damages for breach of contract, or can it enforce performance of the original contract?
Fraudulent transfer claim against a third party: A basic instrument for protecting creditors against debtors’ insolvency
30.06.2022 Actio pauliana, creditor protection
The deepening crisis of debtor honesty means that today, more than ever, creditors face the risk that debtors will not only fail to pay their debts voluntarily, but will hinder enforcement by transferring assets to third parties. In such situations, a fraudulent transfer claim against the third party (sometimes called a “Pauline action”), known and applied in legal systems of many countries around the world, comes to the creditor’s rescue.
Seizure of debtor’s shares in a company: Is it enough?
19.05.2022 interim relief and execution, creditor protection
Often, debtors’ shares in companies are subject to seizure in security or enforcement proceedings. But the debtor does not lose its status as a shareholder in the company after the shares are seized, and the creditor still remains a third party with respect to the company. Thus the debtor may continue to exercise the corporate rights attached to the seized shares, making it difficult for the creditor to satisfy its rights. So it is worth remembering the possibility of challenging corporate resolutions, and appointing a receiver for shares seized in enforcement or security proceedings.
Abuse of legal personality to the detriment of creditors
21.04.2022 criminal law in creditor protection, damages for creditors, creditor protection
Dishonest debtors display great ingenuity in evading their obligations. They may also turn to advisers who, for a hefty fee, provide “sophisticated” ideas to lead creditors astray. Often such ideas involve the creation of legal entities (sometimes a whole group or “chain”) to hide components of the debtor’s business from creditors. Such actions constitute abuse of legal personality for the purpose of harming creditors. Can dishonest debtors and their supporters (including advisers) who knowingly use such methods really rest easy?
Spouse’s consent to incur debt
21.04.2022 interim relief and execution, creditor protection
How should a spouse consent to incurring a debt encumbering the marital community property so that the creditor can obtain security against marital property or execute against marital property? And what should a creditor do if there is no written consent?
How to properly formulate a fraudulent transfer claim against a third party: Conclusions from Supreme Court of Poland rulings
24.02.2022 Actio pauliana, creditor protection, Supreme Court
A claim to set aside fraudulent transfers to a third party (Art. 527 et seq. of the Civil Code) must precisely identify both the parties and the subject matter in the demand for relief set forth in the statement of claim. It is a mistake to assume that the trial court will seek out the missing elements in the justification for the statement of claim.
Non-competition between management board member and company
10.08.2017 corporate, litigation
The Commercial Companies Code prohibits members of the management board of a company from undertaking activity competitive with the company. This ban is intended to protect the economic interests of the company. But what can a company do if the ban is violated?
Liability for representations and warranties concerning the condition of the company in a corporate sale
22.06.2017 protection of contracts, creditor protection, tax, litigation, M&A
Making false representations about the state of tax liabilities of a company being sold may make it necessary to cover the buyer’s losses, even years after the transaction.