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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN GREECE]
B. The Out of Court Workout 1. The Procedure
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 creditor or, in some instances, the district attorney may apply before the competent court, so that the latter will order the bankruptcy of the debtor. A foreseeable inability of payments can also be sufficient, only when the debtor applies for bankruptcy. The court examines the case, and it may order for the bankruptcy of the debtor. However, the court may dismiss the application (e.g. when it is submitted in bad faith, e.g. when a creditor submits it for reasons irrelevant with the bankruptcy or when the debtor wants to avoid paying its debts). If the court accepts the application, it appoints a) a Supervising Judge b) a Bankruptcy Trustee and it orders the debtor’s property sealing.
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 exceed €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
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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