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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN GREECE]
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 the 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. A 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 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).
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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