Persons who deal with the affairs of a dishonest debtor may be liable to creditors

The Supreme Court of Poland considers the protection of the financial interests of the creditor as the main objective of punishing the debtor (and his supporters, if any) for behavior preventing or diminishing the satisfaction of creditors. Thus, persons who deal with the affairs of the debtor can be jointly and severally liable towards the creditor.

The creditors harmed by the offenses defined in art. 300 of the Criminal Code should obtain from the courts the widest possible protection consisting, among other things, in ruling on the joint and several liability for damages of all persons who may be held liable for acts having caused harm to creditors. This is especially true for persons who participated in the management of the debtor’s patrimonial affairs or who knowingly assisted the direct perpetrator. Only then will it be possible to achieve the purposes underlying art. 300 of the Criminal Code.

Penal Code Art. 300 defines offenses broadly related to preventing or diminishing the satisfaction of a creditor.

Penal Code Art. 300 §1 makes it an offense for a debtor to act in such a way that, faced with the threat of insolvency or bankruptcy, he frustrates or diminishes the satisfaction of a creditor by removing, concealing, alienating, giving, destroying, or actually or apparently encumbering or damaging its property.

Penal Code Art. 300 §2 provides for the penalty of a debtor who, in order to thwart the execution of a decision of a court or other state authority, thwarts or reduces the satisfaction of his creditor by removing, concealing, eliminating, giving away, destroying or apparently encumbering or damaging its property seized or liable to be seized, or by removing the indicia of seizure.

Thus, a wide catalog of behavior typical of dishonest debtors intended to evade obligations (and not only those whose existence has already been established by a final judgment), and causing damage to the creditor, is considered a prohibited act. .

In accordance with art. 308, for offenses under s. 300, is liable to the offenses defined in art. . 300 as the debtor. To be clear: not only the debtor, but also the one who manages the debtor’s affairs, can be liable for the offense provided for in Art. 300 of the Criminal Code.

The Supreme Court of Poland has ruled (e.g. in the order of 27 April 2001, case No. I KZP 7/01) that taking care of another person’s business consists mainly of managing that person’s property and managing his or her goods. Thus, a person who takes care of the property affairs of others can be considered as one whose duties and powers include both the care to protect the entrusted property against damage, destruction, loss or deterioration, as well as that the use of these assets in the management process so that the assets or their value is increased. Thus, for example, a member of the management board of a company, a commercial representative, an agent, a commercial representative or an agent, can be considered as a person managing the real estate affairs of another. However, this will not include a janitor, accountant or financial controller.

In accordance with art. 300 in conjunction with art. 18 of the Penal Code, are also punishable all forms of accessory liability consisting in hindering or reducing the satisfaction of the creditor – co-action, directed execution, indirect execution, instigation and complicity.

In its judgment of March 28, 2019 (Case No. V KK 119/18), the Supreme Court firmly upheld the legal opinion that the fundamental purpose of criminalizing the behavior specified in Art. 300 §2 is the protection of the financial interests of individuals, and the main object of protection in this provision is the claims of creditors recognized by court decisions and their protection against dishonest behavior by debtors aimed at preventing them from satisfying these receivables. In the case of this provision, seen through the prism of the solemnity of judicial decisions, the good of justice is an accessory object of protection. It can be deduced from this that the punishability of the behavior described in Art. 300 §2 is mainly aimed at general penal prevention (dissuading debtors and their heirs from dishonest behaviour) and the creation of conditions for compensation of damage resulting from behavior that frustrates or fails to satisfy creditors’ claims.

In my view, the considerations recognized by the Supreme Court in the above-mentioned decision apply equally to s. 300 §1. Therefore, the main purpose of enacting s. 300 §1 should not be taken as guaranteeing as completely as possible the general and abstract objectives of bankruptcy or restructuring proceedings. What must be defended in the first place when applying art. 300 §1 is the financial interest of persons injured by the choice of the debtor (or of a person taking care of his affairs or of a possible support of the direct author), in the face of a threat of insolvency or bankruptcy, instead of thinking about optimal protection of creditors’ interests, to take unfair measures aimed at preventing creditors from obtaining satisfaction on the debtor’s assets.

This understanding of art. 300 §§1-2 of the Penal Code leads to the conclusion that if a debtor commits a prohibited act defined in these provisions, justice must have in mind the broadest possible protection of the interests of creditors injured by these acts. This will be possible when the courts (civil and criminal) grant against the perpetrators of these acts, including the persons managing the debtor’s affairs and various supporters of the direct perpetrators, adequate compensation for the damage caused by the frustration or inability to fully satisfy creditors. In such cases, it is also important to remember the liability for damages of persons who have knowingly benefited from an injury caused to a creditor by one of the acts described in art. 300.

It should be added that the effective protection of the interests of the creditor injured by a fault defined in Art. 300 of the Penal Code may depend on the proper use by the creditor of the institution of joint and several liability for damages of persons to whom joint and several liability for an offense can be imputed (art. 441 §1 in combination with art. 422 of the Civil Code Code). And the courts (civil and criminal) must bear in mind that the effective satisfaction of claims, and therefore the implementation of the main objective of art. 300 §§1-2 of the Penal Code, may depend on the joint and several liability of all perpetrators.