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The Warsaw Voice » Business » July 1, 2009
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More Bankruptcies
July 1, 2009 By A.R.    
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Courts declared 224 businesses in Poland bankrupt in the first five months of the year. To compare, in the same period last year, 159 businesses were declared bankrupt, according to data by Coface Poland, a company that provides business information as well as debt recovery and management services.

Coface Poland says a growing number of businesses are finding it difficult to meet their financial obligations on time. Additionally, the time it takes companies to make their payments is getting longer. In sectors hardest hit by the crisis such as steel, construction and household appliances, the delays have doubled or even tripled, according to Coface Poland.

Due to mounting payment backlogs, businesses are losing their financial liquidity and consequently going bankrupt, Coface Poland said.

At the same time, debt recovery firms have more orders. In the first quarter the value of debt collected by Coface rose by 171 percent compared with the same period last year, according to the company's executives.

"There is a widespread practice whereby businesses are filing complaints in order to delay payments," said Joanna Syzdół, a manager at Coface Poland. "This trend is especially visible in the construction sector, where disputes are difficult to solve and take more time than in other sectors because the investment process is more complex and involves many organizations."

Out-of-court settlements with debtors are less popular these days, Coface Poland says, because a growing number of troubled companies have not been paid by their own customers. For this reason more cases are being handled by courts through debt recovery and law firms.
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