Successful recovery of outstanding payments from the company’s president

In 2018, our client, a yacht shipyard, entered into a settlement with their debtor, a yacht buyer. The debtor was a limited liability company that agreed to pay over 420,000 PLN (plus interest) in installments. Unfortunately, the first installment was not paid.

The client decided to initiate enforcement proceedings, which proved to be ineffective. The bailiff discontinued the proceedings after two years due to the significant number of creditors and the lack of debtor’s assets that could be liquidated to repay the debt.

This created a substantial problem. The outstanding debt, along with costs, grew to over half a million PLN, with no chance of effective recovery.

We needed to act quickly. Fortunately, we managed to identify assets belonging to the debtor company’s president. The challenge was that, given the conditions of the Polish judiciary, we anticipated a lengthy court process, expecting considerable obstruction from the debtors.

Before filling a payment lawsuit against the president in 2020, we submitted a pre-ligation application for security. The security was an entry of a compulsory mortgage in the land and mortgage register of the president’s property. The secured amount included our claimed sum, plus expected costs and interest.

The court accepted our arguments and established the mortgage, which we then registered in the land and mortgage register. This was the first mortgage on the property, allowing us to pursue the secured amount with relative peace of mind.

As anticipated, the payment lawsuit against the president lasted a long time.

We finally won the case (after an expert opinion) in March 2023, when the Regional Court in Gdańsk (first instance) issued its judgment. The president, of course, appealed, but he also lost the appeal (the Court of Appeal issued a judgment dismissing the appeal in December 2023).

As a result, the case was conclusively resolved only at the turn of 2023 and 2024, and only then could we start enforcement proceedings against the secured property. Ultimately, the defendant president conceded and agreed to the negotiated settlement terms (even before incurring bailiff costs)

Thanks to our actions, the shipyard:

• effectively secured its claims despite the debtor company’s dire situation,
• mitigated the risk of losing the president’s assets and prolonged court proceedings,
• could negotiate payment terms after the court process with significant comfort, utilizing a stronger negotiating position.

This was an interesting case that we were able to handle thanks to our knowledge and procedural experience. It also required some legal courage. However, we managed to minimize most potential risks and concluded the matter very positively for the client.