Is dismissal of the board an effective way to avoid enforcement?

Dismissal of the board as a way to avoid enforcement?

A fairly common phenomenon that could be observed when it comes to functioning in the legal transactions of companies was a situation in which, during the ongoing enforcement proceedings against a given company, the management board was suddenly completely dismissed or its individual members submitted effective resignations.

As it is easy to guess, such an operation was not undertaken without a reason, because the members of the indebted company knew well that without the management board, the enforcement proceedings against the company would be “blocked. the probation officer) to represent its interests, however, this solution did not introduce any fundamental changes, because the powers of the probation officer were limited only to the activities aimed at appointing a new management board of the body, but he could not force the shareholders to appoint a new management board or appoint it himself.

Extending the powers of the probation officer

In such a situation, nothing could be done and the probation officer had his hands tied. Therefore, there is no doubt that the most effective solution would be to extend the rights of the probation officer. This was also the case due to the amendment to the Act on the National Court Register and some other acts, which entered into force on January 1, 2015.

Under the new regulations, the competences of the company's probation officer were extended. Currently, the curator is entitled to represent the entity until the appointment of the management board or the liquidation of the entity, and all costs related to the activities carried out by him, as well as the remuneration will be borne by the persons who are obliged to appoint the management board in the given entity. The probation officer is authorized by a court that takes into account the circumstances of a specific case.

Will the amendment accelerate the enforcement process?

Undoubtedly, granting the probation officer appointed (pursuant to Article 42 of the Civil Code) with additional powers resulted in securing the interests of the entity to a greater extent, for example by securing its property, and enabled the continuation of the proceedings initiated with its participation (including enforcement proceedings). There is also undoubtedly the fact that the entire amendment largely contributed to the acceleration and improvement of the conducted proceedings.