Covid-19 in Poland: Anti-crisis shield 2.0 and the threat of insolvency


published on 4 May 2020 | reading time approx. 6 minutes

by Łukasz Szczygieł 


The Act of 16 April 2020 on Special Support Measures In Response to the SARS-CoV-2 Outbreak, which entered into force on 18 April, has introduced a number of legal measures to stimulate financial liquidity of enterprises. However, the measures introduced by that statute are not available to everyone. The aid is not available to enterprises facing insolvency.

Support measures under the shield 2.0 

The shield 2.0 offers a number of financial support measures to help businesses affected by the government’s restrictions stay afloat. The precondition to enjoy that support is that the financial distress be caused by covid-19. Therefore, enterprises whose financial problems started earlier and the coronavirus has only deepened them may be disqualified from the support. They will be left with the measures available under other legal regulations, including the Restructuring Act. 

The financial support under the shield 2.0 will be handled by Agencja Rozwoju Przemysłu Spółka Akcyjna (ARP S.A.) and its subsidiary to which ARP S.A. has delegated tasks. The support is meant to counteract the economic consequences of covid-19 by helping the beneficiary to maintain financial liquidity over the duration of the state of epidemic emergency or the state of epidemic, and for 12 months after that state is recalled until the negative economic consequences for businesses go away. The support includes loans for enterprises or guarantees, sureties and other business financing instruments. The preliminary conditions for using the individual financial instruments are available on ARP’s website:

Application procedure to support ongoing financial liquidity 

The amount and type of support depends on the actual financial consequences suffered by the enterprise as a result of the epidemic and the scale of business. The support is granted in response to an application and is implemented in the form of an agreement. The form of an agreement provides a greater flexibility in reacting to the changing needs of enterprises than normally offered if the support is granted in the form of an administrative decision. At the same time, the regulations lay down the basic conditions that must be fulfilled in the course of every agreement, especially: 
  • the support is granted on arm’s length terms, which means that the terms and conditions must be similar to those offered by financial institutions;
  • the support is granted in phases, which means that loans and other forms of financing are granted in tranches. This means that the agreement must stipulate milestones signifying subsequent stages of support (this does not apply to the forms of financing which require that the money be paid out on a one-off basis);
  • the support must be granted for a specific objective set in the agreement;
  • the support and its repayment have been assigned specific dates and the support itself requires a security on the part of the enterprise;
  • the enterprise-beneficiary must submit financial reports to ARP S.A. which will be entitled to check them. 
The application procedure starts with submitting an application accompanied by a statement confirming the financial distress and a description of the planned measures to stabilise the financial standing. The application must be submitted on the template which will be made available on (it was not available yet at the time of writing). The application should be processed within no more than 14 days and the agreement should be signed within 5 days after its content is agreed. 

Choice to be made 

If you consider applying for the support from ARP S.A., you have to consider the limitations introduced by the special statute. ARP S.A. cannot grant the financial support to enterprises which have declared bankruptcy or opened restructuring proceedings. This means that the support is not available to enterprises for which:
  • a bankruptcy order (even if not yet final) has been issued;
  • an order to open restructuring proceedings (e.g. rehabilitation, arrangement, amalgamation) has been issued;
  • the court has approved an arrangement in the course of the arrangement approval process.
Moreover, if an enterprise has filed a petition to open any of the above proceedings, it will not be able to benefit from the support from ARP S.A. because the grant procedure gets suspended until the petitions for restructuring or bankruptcy are processed conclusively. Consequently, the procedure of applying for support from ARP S.A. cannot be resumed until the proceedings are finally over. Given the waiting time for the consideration of such matters, this translates into several month's worth of delay in getting the support. 

Therefore, an enterprise has to decide early whether it wants to apply for support under an agreement with ARP S.A. or whether it wants to seek protection by means of restructuring proceedings. 

Ineffectiveness of the support measures 

It is also worth asking a question what happens if an enterprise signs an effective agreement with ARP S.A. and indeed gets the support but cannot fulfil its contractual obligation. You should remember that if that obligation becomes due, ARP S.A. or another entity acting as a creditor will seek to enforce the obligation. Still, you can try to apply for opening of one of the restructuring proceedings earlier. Unless the support claims are secured by means of mortgage, maritime mortgage, pledge, registered pledge or a fiduciary transfer of title, they will be covered by an arrangement if you wish to open restructuring proceedings soon after the support is granted. However, if the claims are secured by any of the above measures (this list of the required measures available on does not include them), ARP S.A. or its subsidiary would have to first agree that the claims be covered by the arrangement. 
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