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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN GREECE]
occur (e.g., to pay to a creditor an amount which is essential for his and his family survival). The claims of the employees for their wages are not, in principle, affected by the measures, unless the court decides that there is an important reason. 2.2 The protection at the time that the rehabilitation agreement has been concluded and submitted to the Court 2.2.1 The Procedure At the time that the rehabilitation agreement has been submitted to the court for validation, there are two types of provisional protection. First of all, there is a provisional protection granted to the debtor automatically (i.e., the protection is granted directly by the law and no court decision is required) and it is limited to the measures that are listed on article 50 of the law 4738/2020 (see below par. 2.2.2). Secondly, an additional, parallel protection (i.e. additional to the measures that apply automatically) may be granted as an injunction with a court decision (and a provisional order), exactly as the above mentioned protection granted before the conclusion of the rehabilitation agreement (see above paras 2.1.1-2.1.2) The purpose of the provisional protection at this stage is on the one hand to keep the business of the debtor running and on the other hand to maintain its property. 2.2.2 The Type of the Protection The automatic provisional protection granted at this stage, according to article 50 of the law 4738/2020, includes the suspension of any enforcement of creditor’s claims against the debtor (e.g., by seizure of assets), the ban of proceeding with injunction against the debtor and the ban (in principle) of transferring of the real estate property and the business equipment on behalf of the debtor. Furthermore, any set-
off regarding claims born before submission to the court is restricted. It is noted that the time limits regarding creditors’ claims and rights against the debtor and the guarantors/co-debtors are sustained. The above, automatic protection does not affect, inter alia, the rights of the creditors to file lawsuits against the debtor, the right of the debtor to file an application for bankruptcy, the payments on behalf of the debtor to third parties in order to keep its business running and any enforcement of claims for debts that were born after submitting the rehabilitation agreement to the court. The aforementioned protection is granted only once and for a 4-month period. After the expiration of the 4-month period it is at the court’s discretion to provide further protection according to the procedure and the type of protection above mentioned in paras 2.1.1-2.1.2, or to revoke, modify or prolong the aforementioned protection. The automatic protection does not apply to co- debtors and the debtor's guarantors. provisional protection may apply to them only by a court decision in the procedures mentioned above (paras 2.1.1-2.1.2) (but it is argued that the letters of guarantee are not affected). For any additional protection to the debtor that may be ordered by a court, see above, par. 2.1.2. 2.3 The protection after the validation of the rehabilitation agreement from the Court After the validation of the rehabilitation agreement by the court, the agreement binds both the debtor and, in principle, all of its creditors, whose claims are regulated by the agreement, even those who were not part of the agreement or voted for the agreement. However, the creditors whose claims were born
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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