Non-adoption and untimely adoption of the resolution to grant shares in exchange for capital bonds

The Act of 14 April 2023 introduced a new hybrid instrument of capital bonds into Polish law. Upon a triggering event specified in their terms and conditions, capital bonds are converted into shares of the issuer. The conversion takes place as a result of adoption of a resolution of the issuer's management board to grant shares, within the time limit specified in Article 4544 § 1 of the Code of Commercial Companies. The article analyzes the consequences of failure to meet the deadline for adopting the resolution on the grant of shares, i.e. late adoption of the resolution, failure to adopt the resolution, and adoption of the resolution despite the non-occurrence of the triggering event. Members of the issuer's management board and the issuer are liable for damages caused by the delay in adopting the resolution. In addition, the bondholder may demand that the issuer's management board adopts the resolution. Article 64 of the Civil Code and Article 1047 § 1 of the Code of Civil Procedure shall apply. An early resolution is null and void, the shares granted in it do not exist and should be eliminated from the market, unless they have undergone assimilation.