Option agreements need to be analysed on a case-by-case basis, taking into account the circumstances in which they are entered into. A company can take legal action against members of its management board for harm done to the company due to entering into options transactions. In situations in which they are in danger, firms can begin to negotiate with the bank or pursue the matter in court.

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Potential solutions
In cases in which advisors at a bank are in gross negligence of disclosure obligations, firms can file with courts to have the agreements invalidated.

- If the bank's customer has made a legitimate mistake with respect to the wording of the agreement, then it can revoke the legal consequences of the agreement provided it meets the prerequisites laid down by the law - says Michał Krawczyk, legal advisor at Krawczyk & Partners. In order to be confirmed as legally binding, an agreement must undergo close analysis, and the circumstances in which it was concluded and formal and legal conditions must be taken into account in particular. The second solution is a new arrangement with the bank.
The fact that some firms suffered losses when speculating on options does not mean that banks made money on them - notes Zbigniew Szczerbetka, a partner at Deloitte. In his view, as a rule, the banks do not speculate, they make money on bank charges.

- It is not in banks' interest for an exchange rate to change in a negative way for customers once the transaction has taken place. On the contrary, it causes a problem for banks because risks arise with respect to potential cash flow problems of customers. Banks should avoid offering products which involve speculating and which might lead firms to have cash flow problems - says Zbigniew Szczerbetka.

The option agreements with the highest risk are therefore not only problems for businesses but also for banks.
- It takes two to tango. In order for the negotiations to be successful, each party must give up some of its claims, so that the parties can continue to do business - says Mr. Miąso.
The third possible solution is for the bank to cover the liabilities.

- Debtors are liable up to the value of their assets. When a customer's liabilities exceed its assets, this can be a reason for requesting that the creditor write off some of the liabilities.  If no settlement is reached it has to apply for bankruptcy. A bank that calculates the cost of capital might be interested in obtaining the former nominal amount, which in real terms will be lower following distribution of the bankrupt estate - says Michał Krawczyk.

author: Krzysztof Polak, Gazeta Prawna