The Management Board of ACTION S.A. hereby announces that on 1 August 2016 District Court for the Capital City of Warsaw in Warsaw issued a decision on the opening with respect to ACTION S.A. of reorganization proceedings within the meaning of the Act of 15 May 2015 Restructuring Law (Journal of Laws of 2015 item 978 - hereinafter: Restructuring Law).
First of all, we hereby announce that ACTION S.A. is still in business. In accordance with the above decision, the management over the entire enterprise of ACTION S.A. within the scope not exceeding the ordinary course of business is still exercised by the Management Board of ACTION S.A.
As of 1 August 2016, ACTION S.A. performs all liabilities incurred from this date within the normal mode. Liabilities incurred previously are subject to arrangement, provided, however, that the Management Board submitted preliminary arrangement proposals, under which the Company intends to pay off all its creditors in 100% and to conduct necessary restructuring actions.
We also stress that the above proceedings are not bankruptcy proceedings. Pursuant to Article 3 § 1 of the Restructuring Law: “The objective of restructuring proceedings is to avoid the declaration of bankruptcy by the debtor, by allowing him to conduct restructuring by way of entering into arrangement with his creditors, and in the case of reorganization proceedings – also by way of conducting reorganization activities, with the protection of legitimate rights of the creditors”.
Therefore, the regulations of this Act are to take into account the situation of the debtor (and to allow him to resume normal operations) as well as the general body of creditors who may not be treated to their detriment (Article 8(1) of the Restructuring Law Act). A condition precedent for the opening and conducting restructuring proceedings is the debtor's capacity to satisfy costs and liabilities in the course of restructuring proceedings on a regular basis (Article 8(2) of the Restructuring Law Act).
The Management Board of ACTION S.A. announces also that filing for opening of the restructuring proceedings resulted solely from a threat of insolvency within the meaning of Article 6(1) and (3) of the Restructuring Law.
The above decision was made out of necessity to secure legal protection for the Company and all of its stakeholders from the threat of “predatory debt collection” by the preferred creditors. Had such debt collection been conducted, only those creditors would have been satisfied, and the others would not have the same chance, and the Company would have to declare bankruptcy – even in a situation where the Company is fully solvent and holds actual property of significant size.
With best regards,
The Management Board of ACTION S.A.