Recovery Regime at PKP CARGO: Legal Protection on Paper, but Ineffective in Practice?

The recovery regime, intended to protect PKP CARBOTABOR, a subsidiary of PKP CARGO, from creditors and restructure its operations, has proven insufficient. Despite legal protection, the company faced power supply interruptions and accusations of failing to meet obligations.

Last week, PKP CARBOTABOR, a subsidiary of PKP CARGO, discovered firsthand that the recovery regime, which forms the legal basis for restructuring in Poland and protects a company from creditors, does not fully shield it from liabilities. It is worth noting that PKP CARBOTABOR is one of the largest workshop and repair companies for freight rail vehicles in Europe, employing approximately 2,400 people across sixteen facilities.

According to information from labor unions, the electricity distributor likely halted power supplies to all operations. Protection from insolvency under the recovery regime does not preclude such actions. The Solidarity Union suspects that the company may have failed to pay for electricity, hot water, and other utilities, as reported by Kolejowy Portal.

In the meantime, significant changes have occurred: power supplies have been restored, the company's management has withdrawn the application for the recovery regime, and a new selection process for a board member responsible for financial affairs has been announced. It appears that the recovery regime may not be the ultimate solution for all parts of PKP CARGO. While the parent company PKP CARGO initially opted for this legal framework, its subsidiary PKP CARBOTABOR joined at the end of July, only to file for its termination on August 9.

Source: Kolejowy Portal