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[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN GREECE]
1. Protection after the application for bankruptcy and until the court decision that orders the bankruptcy After the application for bankruptcy has been submitted, whoever has a legitimate interest may submit before the competent court an application for Provisional Measures. The president of the court may order as an injunction whatever provisional measure he/she estimates as adequate for the maintenance of the assets of the debtor. The purpose of these measures is not to avoid the bankruptcy (as in the pre- bankruptcy proceedings), but it is to avoid any reduction of the assets or of their value, so that the claims of the creditors may be satisfied by the bankruptcy proceedings, when and if the bankruptcy will be decided by the court. Any ordered provisional measure stops automatically, when the decision of the court that orders the bankruptcy (or dismisses the application) is issued and registered in the Electronic Registry of Solvency. The Provisional Measures may indicatively include the suspension of any enforcement of creditor’s claims against the debtor (e.g. by seizure of assets), the prohibition of submitting any civil action against the debtor, the ban of proceeding with injunction against the debtor, the ban of transferring of the real estate property and the business equipment on behalf of the debtor, appointing a sequistrator, banning any termination of contracts, ordering the prolongation of contracts that are to be expired, maintenance of the current jobs in the company etc. In principle, the aforementioned suspension of any enforcement of creditor’s claims against the debtor does not affect in
principle the secured creditors from satisfying their claim from the liquidation of the security (e.g. mortgaged or pledged assets), unless there is an admissible proposal for selling the debtor’s undertaking (or its sectors) as a whole. Furthermore, the provisional measures do not apply regarding some specific types of claims such as the termination of a lease agreement, if the debtor owes at least six- month rents, the financial security agreements of the L. 3301/2004 or the rights of the assignee in case of an assignment of a claim. 2. Protection after the court declares the bankruptcy The “protection” mentioned in the present paragraph constitutes consequences of the declaration of bankruptcy for the debtor and the creditors. Some of the consequences are the following: - After the decision of the court that declares the bankruptcy, the debtor may not in principle administrate or transfer its property/assets- Bankruptcy Estate- (this does not include any property/assets acquired by the debtor, after the bankruptcy is declared, unless it is interest and other periodic benefits, as well as ancillary claims or rights, even if they are born or developed after the declaration of bankruptcy, if they come from a contract or right existing before the bankruptcy was declared). The administration passes to the Bankruptcy Trustee. - The creditors may seek to be paid off in principle only through the Bankruptcy Estate. From the declaration of bankruptcy, any
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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