Filing fee on fraudulent-transfer claims slashed by up to PLN 199,000
The July 2023 amendment to Poland’s civil procedure rules made a big change in the filing fee on a fraudulent-transfer claim against a third party. Now, if the amount in dispute at the first instance or on appeal exceeds PLN 20,000, the fee will be capped at PLN 1,000. There is one condition: the creditor must hold specific legal proof of its claim against the debtor. Previously, the fee on such a claim could run as high as PLN 200,000.
“Permanent economic relations” between the parties to a transaction detrimental to a creditor
A fraudulent transfer claim against a third party protects participants in commerce and helps combat reprehensible actions by debtors aimed at avoiding payment of their debts. Under a fraudulent transfer claim against a third party, a creditor affected by the debtor’s fraudulent behaviour may enforce a claim against assets that the debtor transferred to a third party.
“Close relationship” of the parties to a transaction detrimental to creditors
Through a fraudulent transfer claim against a third party, a creditor impacted by the debtor’s dishonest behaviour can enforce its rights against property transferred by the debtor to a third party. This allows the creditor to challenge the effectiveness of a transaction carried out with a third party to the creditor’s detriment.
Protecting investors from unlawful behaviour by founders of startups
According to analysts, only 10% of startups are successful. Almost 90% of them fail—20% in their first year. On the record, such failures are often attributed to the founders’ failure to identify the customers’ needs, i.e. a real gap in the market, or blamed on competition and the uniqueness of the service or product. In less guarded moments, e.g. in online forums, much heavier accusations have been levelled against founders, such as the claim that most startups are designed to defraud investors or launder money.
Compensation from a developer who despite a preliminary contract sells the property to another person
Residential real estate prices in Poland have been rising steadily for many years. A house or apartment promised to be built or sold just a few months earlier may now have a market price much higher than on the date of signing of the preliminary contract. This may tempt some developers to renege on the final contract and instead sell the unit to another purchaser at a higher price. In such a case, what relief can the frustrated buyer obtain against the developer?
What is a commercial transaction?
The question might seem simple. The payment gridlock regulations (the EU’s Late Payment Directive and, in Poland, the Act on Combating Excessive Delays in Commercial Transactions) apply to commercial transactions. Although the regulations have been in force for more than a decade, in practice they still raise numerous doubts.
When a debtor starts litigation to avoid paying a debt—continued
It is worthwhile for creditors to take part in litigation even if the outcome could go against them. This way, they can help prevent the court from issuing rulings sought by colluding debtors and their allies.
When a debtor starts litigation to avoid paying a debt
Dishonest debtors are increasingly daring to use court proceedings to fictitiously dispose of funds to pay their debts. They believe that if they obtain a final judgment that orders them, for example, to pay an amount to a third party, the creditor will not be able to contest the payment. But is the creditor completely defenceless? With this article, we are kicking off a series on what to pay attention to and how to react when a debtor initiates court proceedings that may render the debtor insolvent.
Maintenance for the debtor’s relatives may be considered injurious to creditors
Acts by a debtor benefitting a third party—a family member entitled to maintenance—can violate the interests of other creditors and frustrate their ability to satisfy their claims from the debtor’s assets. This entitles creditors to seek legal protection under Art. 527–534 of the Polish Civil Code. A fraudulent transfer claim against a third party can be used to set aside a deed establishing a maintenance obligation.
A debtor disposes of assets before the debt falls due: Can the creditor pursue a fraudulent transfer claim against a third party?
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?
Establishing the invalidity of a fraudulent agreement as an alternative to ruling it ineffective under Civil Code Art. 59
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?
Acknowledgement of debt: What does the debtor’s behaviour mean?
Recently, the Supreme Court of Poland commented on the subject of acknowledgement of debt, and at the same time gave some general guidance on how to interpret a debtor’s statements and behaviour. This is a key practical issue, as action by the debtor can cause interruption of running of the statute of limitations on the claim. Therefore, debtors should be cautious about what they state to creditors. Conversely, in many cases, creditors can take advantage of the debtor’s behaviour to improve their legal position.
