The Practical Consequences of Supreme Court Resolutions (III Czp 45/06 and I Pzp 1/10) with Reference to the Term "Insolvency" in Article 543 of the Bankruptcy and Rehabilitation Law

Abstract

The enactment of the Bankruptcy and Rehabilitation Law that introduced a unified legal construction for insolvency, divided into winding-up bankruptcy and reorganization bankruptcy, gave rise to the question about understanding the term "insolvency" in these separate statutes. The Supreme Court has not been uniform in its rulings. In one case insolvency was treated as the equivalent of a winding-up bankruptcy, in another it was used to cover both types of proceedings. In the first case, the Supreme Court ruled on the basis of a literal and systematic interpretation, in the second, the Court placed an emphasis on the functional aspects. This ambiguity in meaning cannot meet with approval because its practical consequences are too serious.