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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN GREECE]
after the validation of the agreement are not bound. The content of the rehabilitation agreement can be open to the parties, which may include, inter alia, reduction of the debtor’s liabilities against its creditors and/or modification of the liabilities of the debtor (such as the time of payment or substitution with an agreement to take part to the debtor’s profits) and/or capitalization of liabilities with the issuance of e.g. shares and/or transfer of the debtor’s undertaking, and/or transfer of the management of the debtor’s undertaking to a third party and/or further funding for the rehabilitation etc. It must be noted that the claim of a creditor against the co-debtors and the guarantors are in principle limited to the amount that the liability of the debtor has been reduced, according to the validated rehabilitation agreement, unless the creditor does not consent on that (in the latter case, the liabilities of the co-debtors and the guarantors remain intact against the creditor). B. The Out of Court Workout 1. The Procedure The Out of Court Workout is a new procedure, established by the L. 4738/2020 (art. 6 et seq). The law excludes some debtors from the eligibility for these proceedings (e.g., financial institutions, insurance companies, debtors whose debts to financial institutions or the State do not excee d €10,000 etc.). The Out of Court Workout is a procedure done electronically via a special, public electronic platform. The procedure commences when the debtor or some types of creditors (financial institutions, the State, social security funds) file an on-line application via the above platform to the competent Authority appointed by the law, the Special Secretariat for the Administration of Private Debt. With the application the debtor
submits several data and documents including a list of its creditors, its assets etc. Subsequently, the creditors who participate may submit a proposal for the restructuring of the debts. If a restructuring agreement is not concluded within 2 months from the application, or from the time that the creditors declare that they do not wish to submit a restructuring proposal, the procedure is considered fruitless. 2. The Protection First of all, the filling of the application does not constitute a serious reason for the termination of contracts in force. Furthermore, from the filling of the application and until the end of the Out of Court Workout, any measure of enforcement of claims on the debtor’s movable and immovable assets and claims is sustained automatically by the law. Any relevant action that commences during the above period is void. Any auction scheduled to take place within 3 months from the application and any preparatory action of auction (including the confiscation) by a secured creditor, are not affected. After the conclusion of the restructuring agreement, the creditors which are bound by it may not proceed with any enforcement proceedings against the debtor and all the pending or not measures of enforcement (either individually or collectively) are sustained during the period of the agreement and under the condition of its performance II. Bankruptcy The Bankruptcy is focused on the payment of the debtor’s debts to the creditors by the debtor’s assets, either by liquidation of them by a public auction or by selling the debtor’s undertaking as a whole or partially. When a debtor is in a constant and general inability of payment of its debts, the debtor or a
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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