The organisers of the Conference thank the following for their support

The organisers of the Conference thank the following for their support Conference Sponsor www.buse.de Conference Supporter Academic Forum Sponsor Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili www.cndcec.it www.edwincoe.com

The Newly Introduced Insolvency Code of Greece Alexandra Kastrinou, University of Westminster

Metamorphosis of the Greek insolvency law • Replaces an outdated regime-i.e. Law 1892/1990 Art.44-46 • Law 3588/2007 is primarily designed to ensure the rescue of viable distressed companies and accordingly preservation of employment. • ‘Insolvency proceedings are aimed at the collective repayment of the creditors, which can be achieved by means of a sale of the debtor company’s assets, or preferably any other way, such as a reorganisation plan, which aims to the preservation of the company’.Art.1 • The new law introduces two clear-cut procedures • Conciliation (‘sindialagi’) & • Judicial re-organisation procedure (‘anadiorganosi’)

Article 99-The Conciliation procedure • Early stage intervention: • ‘Debtor in possession’ regime–allows debtors to overcome the financial difficulties experienced by their business, whilst they remain in control of their company. • Pre-condition to access: the debtor company is experiencing financial difficulties, either present or foreseeable, but importantly is not in cessation of payments [A.99(1)] • Conciliation is largely a court-supervised procedure • Application to court: • The debtor’s application must contain detailed information in relation to the social importance of the company, from an employment perspective. • The debtor is required to submit information with regard to the financial situation of his company, together with a plan, which is aimed at the extrication of the company from its financial crisis.

Appointment of conciliator • The court has extensive powers in considering the information submitted by the debtor---Where necessary - appointment of expert, so as to ascertain the financial position of the applicant and whether or not financial difficulties are due to fraudulent behaviour [A.99(3)]. • Where satisfied that a viable plan exists it will appoint a conciliator. • The conciliator is entrusted with the task of achieving an agreement between the debtor and the creditors in order to overcome the company’s financial difficulties and safeguard its survival. [A.101(1)] • Time limitations: an agreement must be achieved within a period of two months, which may be extended, upon his application, for one more month. • (intention to ensure quick and effective rehabilitation)

Ratification of the Agreement • Ct to ratify within ten days from the time it was reached [A.103(1)]. • Ct discretion: It may choose not to validate an agreement, where it is satisfied that: • the company is in cessation of payments; • the terms of the agreement do not safeguard the continuation of trading for the company; • the interests of dissenting creditors are prejudiced; • d) the duration of the settlement stipulated by the agreement exceeds the period of two years. • Note: During the time the Agreement is effective any claims against the debtor are stayed A.104(1) (b)

End of the Agreement • Automatically comes to an end after two years [A.105(2)] • Termination at earlier stage, where: the debtor company has become insolvent and entered either liquidation or formal reorganisation proceedings [A 105(3)]; • ct may end upon creditors’ application, where satisfied that the terms have not been properly implemented • Or it becomes apparent from the circumstances, in particular the financial state and the implemented rescue measures that the viability of the continuation of trading for the company is unfeasible

Judicial Re-organisation • The re-payment of the ailing company’s creditors, • can be achieved either through the continuation of the company’s operation by means of : • a re-organisation plan- Art.107; • or • b) with the initiation of bankruptcy proceedings (Art.1)

Content of the re-organisation plan • The information contained in the re-organisation plan is divided into three stages (Art.109) : • ‘informative’ - debtor to submit info in relation to the co’s financial situation. • ‘descriptive’ - debtor to describe the origins of co’s distress. • ‘development’ - debtor to disclose any info, which would be likely to affect the implementation of the re-organisation plan, its acceptance by the creditors or its ratification by the court. • The plan must provide a comparison between the suggested reorganisation plan and liquidation with regard to the re-payment of the creditors’ . • Debtor to provide a list of measures he has adopted, or intends to adopt, in order to ensure the satisfaction of the suggested rearrangement of creditors’ claims. • A list of measures which are concerned with changes in the operational aspects and the unproblematic continuation of the company.

The re-organisation plan is built upon four dogmatic premises: • A minimum percentage up to which the debt may be reduced (no less than 20%); [Art.110] • the compulsory categorisation of creditors’ claims; a) secured; b) preferential; c) unsecured; and d) employees. [Art.111] • the rights of secured creditors; and • the paripassu satisfaction of each class of the creditors, who are participants to the plan. • The ct’s role in the process is enhanced: • It will examine the plan prior to its acceptance by the creditors. • It may reject where: the correct procedure for drafting has not been followed; or • it is too obvious that the creditors’ committees will reject the plan. • it is too obvious that the satisfaction of creditors’ claims included in the plan is not feasible. [Art. 109-115]

The Creditors’ Committees • Following acceptance of the plan by the ct, the plan is submitted before the creditors at a creditors’ meetingfor approval. [Art.117] • Three months approval time limit • Committee to suggest amendments of the re-organisation plan. • Consent: 60% of all claims at 40% preferential creditors • Creditors’ committee- supervisory role • May appoint a trustee, who is under an obligation to report to the committee every six months.

Ratification of the Agreement • Court to sanction the agreement- stay of claims during the time the court examines the plan and its subsequent ratification or rejection in order to prevent the subtraction of assets [Art.114(4)]. • Where no ratification,--the provisions of the plan have no legal effect and do not bind the creditors who voted on it [Art.122(1)]. • Once the plan has been ratified by the court, its provisions become binding upon all creditors, even dissenting or creditors who did not participate in the voting process [125 (1)]. • Debtor undertakes to fulfil the terms of the agreement. • Cancellation: still possible, where debtor fails to comply with his obligations, as stated in the plan (i.e. With regards to Creditors’ rights’)

Conclusion • The new Law promotes corporate rescue, as it places emphasis on procedures that safeguard the continuation of traumatised businesses. • Balanced approach between protection of creditors’ rights and affording a second chance to the honest but unsuccessful debtor. • Quick and effective procedures for the preservation of problematic businesses • Simplified bankruptcy procedures for Small businesses.

The organisers of the Conference thank the following for their support Conference Sponsor www.buse.de Conference Supporter Academic Forum Sponsor Consiglio Nazionale dei Dottori Commercialisti e degli Esperti Contabili www.cndcec.it www.edwincoe.com

The organisers of the Conference thank the following for their support