{"id":143632,"date":"2026-07-08T11:19:12","date_gmt":"2026-07-08T11:19:12","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=143632"},"modified":"2026-07-10T07:58:22","modified_gmt":"2026-07-10T07:58:22","slug":"greece-restructuring-insolvency","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/greece-restructuring-insolvency\/","title":{"rendered":"Greece: Restructuring &amp; Insolvency"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-143632","comparative_guide","type-comparative_guide","status-publish","hentry","guides-restructuring-insolvency","jurisdictions-greece"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Psarakis &amp; Kefalas Law Firm<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/06\/Logo-1.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Psarakis &amp; Kefalas Law Firm<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/06\/Logo-1.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Restructuring &amp; Insolvency laws and regulations applicable in Greece<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What forms of security can be granted over immovable and movable property? What formalities are required and what is the impact if such formalities are not complied with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Greek law, security over immovable property is primarily provided by way of mortgage and, in banking practice, in particular, by way of a preliminary mortgage (prenotation of mortgage). Following recent procedural reforms, consensual preliminary mortgage registrations may now be effected on the basis of a lawyer\u2019s act, provided that the debtor\u2019s consent has been duly given, and must be registered the competent Land Registry or Cadastral Office. Where, by contrast, the preliminary mortgage is sought on a compulsory basis or in contentious proceedings, the creditor must rely on a payment order or a court judgment, followed by the relevant registration. The preliminary mortgage confers a right of priority and, once the secured claim has been finally adjudicated, may be converted into a full mortgage ranking, as to priority, retroactively from the date of its original registration.<\/p>\n<p>As regards movable property, the classic form of security is the pledge, which as a rule requires the transfer of possession to the lender or to a third party. For reasons of practical flexibility, non-possessory forms are also employed, such as non-possessory pledge under Law 2844\/2000 and, more recently, under Law 5123\/2024, which requires a written agreement and public notice. The same Law also governs the creation of a pledge over receivables, which requires a written agreement between the pledgee and the pledgor, notification of the pledge to the debtor of the pledged claim, and registration with the Electronic Pledge Registry.<\/p>\n<p>In addition, Law 3301\/2004 establishes a special regime of financial collateral over cash, financial instruments and credit claims, applicable primarily to transactions with banks, investment firms and other eligible legal entities. This regime is characterised by reduced formal requirements: it calls for neither a notarial deed nor a court order, written or electronic evidence of the agreement being sufficient. It confers enhanced powers upon the collateral taker, such as immediate liquidation, (liquidation), set-off or, where expressly agreed, appropriation of the collateral on the basis of a pre-agreed method of valuation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What practical issues do secured creditors face in enforcing their security package (e.g. timing issues, requirement for court involvement) in out-of-court and\/or insolvency proceedings?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Secured creditors face practical obstacles that frequently erode the actual value of their security. In enforcement proceedings under the Greek Code of Civil Procedure, the principal obstacle is time: an enforceable title is required, together with the service of a writ of execution, seizure, compliance with statutory deadlines, and the conduct of an electronic auction, which ordinarily takes place several months after the compulsory seizure \u2014 in the case of auctions of immovable property, generally within seven to eight months. At the same time, the debtor may lodge objections or apply for a stay of enforcement, while defects in the seizure, valuation, the service or the procedure may lead to the annulment of the auction.<\/p>\n<p>In bankruptcy, the process is collective and liquidation is generally conducted by the Bankruptcy trustee. Secured creditors are entitled to initiate the sale of the collateral themselves within the first nine (9) months following the declaration of bankruptcy; if, however, they fail to act, or if the process is delayed, competence reverts to the Bankruptcy trustee. Bankruptcy sales proceed more quickly than those under the Code of Civil Procedure, since the auction may be scheduled within thirty to forty-five (30\u201345) days of the declaration, and an automatic price reduction is provided for in the event of unsuccessful auctions. Nonetheless, weak demand, the absence of competitive bidding and the costs associated with the Bankruptcy trustee, valuers, service of process, publication and litigation remain critical concerns.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What restructuring and rescue procedures are available in the jurisdiction, what are the entry requirements and how is a restructuring plan approved and implemented? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Greek law provides two principal restructuring and rescue mechanisms for businesses in financial distress under Law 4738\/2020: the Rehabilitation Procedure and the Out-of-Court Workout Mechanism.<\/p>\n<p>The Rehabilitation Procedure is available to legal entities facing present or imminent insolvency. It is initiated by means of a Rehabilitation Agreement concluded between the debtor and creditors holding at least 50% of the claims secured by special privilege and at least 50% of the remaining, unsecured claims. The agreement is then submitted for ratification to the competent court. Once ratified, the Rehabilitation Agreement becomes binding on all affected creditors, including dissenting creditors, provided that the statutory conditions are satisfied \u2014 in particular the \u201cno creditor worse off\u201d test, pursuant to which no creditor may receive less than it would obtain in a hypothetical liquidation in bankruptcy. The debtor\u2019s management generally retains control of the business during the rehabilitation proceedings, subject to the terms of the Rehabilitation Agreement; the court may, however, upon application by the debtor or by any creditor, appoint a Special Administrator (Special Mandatary) pursuant to Article 55 of Law 4738\/2020.<\/p>\n<p>The Out-of-Court Workout Mechanism is a largely automated restructuring process conducted through the electronic platform of the General Secretariat for Financial Sector and Private Debt Management. Through the Out-of-Court Workout Mechanism, debtors may restructure the entirety of their debts towards financial institutions, the Greek State, the Social Security Funds and the Municipalities. Creditors are deemed automatically to have accepted the restructuring proposal generated by the algorithm only in respect of certain categories of vulnerable debtors. It should further be noted that the Out-of-Court Workout Mechanism does not interfere with the debtor\u2019s management or operation of the business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor in restructuring proceedings obtain new financing and are any special priorities afforded to such financing (if available)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Rehabilitation Agreement may provide for the debtor \u2014 or an entity to which the debtor\u2019s business is transferred \u2014 to obtain interim or new financing, whether for the purpose of preserving the value of the business during the proceedings or for the implementation of the business plan following rehabilitation. Claims arising from financing provided under the Rehabilitation Agreement, or from financing extended during the negotiation period, enjoy super-priority and are to be satisfied in preference to all other claims in any subsequent bankruptcy, pursuant to Article 167 of the Greek Insolvency Code (Law 4738\/2020), irrespective of whether the Rehabilitation Agreement is ultimately ratified by the court, provided that the purpose of the financing or supply, and the existence of this priority, are expressly stipulated in the Rehabilitation Agreement or in the agreements concluded during the negotiation period.<\/p>\n<p>By contrast, the Out-of-Court Workout Mechanism does not provide for new-money financing, save for the limited State subsidy available to qualifying vulnerable debtors under Article 28 of Law 4738\/2020.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a restructuring proceeding release claims against non-debtor parties (e.g. guarantees granted by parent entities, claims against directors of the debtor), and, if so, in what circumstances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under the current Greek insolvency framework, the release of third-party obligors \u2014 such as guarantors or co-debtors \u2014 from their obligations is not automatic. In principle, creditors\u2019 rights against guarantors and co-obligors are not reduced to the amount recoverable from the debtor under the Rehabilitation Agreement, unless the creditor concerned expressly consents to such limitation or discharge.<\/p>\n<p>Furthermore, under the Out-of-Court Workout Mechanism, guarantors and co-debtors benefit from the restructuring only where they have submitted the application jointly. The sole exception to this rule concerns individuals bearing joint and several liability, as directors, towards the Greek State and e-EFKA (the Unified Social Security Fund) under tax and social security legislation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors organize themselves in these proceedings? Are advisory fees covered by the debtor and to what extent?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For a Rehabilitation Agreement to be ratified by the court, it must be supported by the debtor and by creditors representing more than fifty per cent (50%) of the claims secured by special privilege and more than fifty per cent (50%) of the remaining claims affected by the agreement. Two classes of creditors are accordingly distinguished: the first comprises creditors holding claims secured by special privilege and the second all remaining creditors. A cross-class cram-down is available under Article 54(2) of Law 4738\/2020, which sets out the conditions under which a Rehabilitation Agreement may be confirmed notwithstanding the opposition of a dissenting class of creditors.<\/p>\n<p>The Out-of-Court Workout Mechanism, on the other hand, requires creditors to approve the agreement subject to specific majority thresholds: 60% of the total claims held by financial institutions, including at least 40% of the total secured claims held by such institutions. In addition, the role of the coordinating creditor has been introduced: this creditor is designated by the financial institutions as the one holding the largest aggregate recovery per debt, is responsible for facilitating coordination among the participating creditors, and is entitled to submit an independent debt-restructuring proposal.<\/p>\n<p>Greek law does not provide for creditors\u2019 committees in these proceedings. The fees of advisers \u2014 such as lawyers, economists and valuers \u2014 are borne by the debtor.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What is the test for insolvency? Is there any obligation on directors or officers of the debtor to open insolvency proceedings upon the debtor becoming distressed or insolvent? Are there any consequences for failure to do so?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Under Law 4738\/2020 (Article 77), the test for insolvency is the cessation of payments \u2014 that is, the general and permanent inability of the debtor to meet its monetary obligations as they fall due. A debtor, whether an individual or a legal entity, is presumed to have entered a state of cessation of payments where it fails to pay its overdue monetary obligations to the State, the Social Security Funds or financial institutions in an amount equal to at least forty per cent (40%) of its total overdue obligations (or sixty per cent (60%) in the case of small-scale bankruptcy) for a period of at least six (6) months, provided that its outstanding financial obligations exceed thirty thousand euros (\u20ac30,000).<\/p>\n<p>Upon entering a state of cessation of payments, the bankruptcy petition must be filed within thirty (30) days (Article 79). Otherwise, the directors or managers of the debtor (where a legal entity), being those responsible for the delay and vested with authority to file for bankruptcy on the entity\u2019s behalf, may be liable in damages to the company\u2019s creditors for the loss thereby occasioned (Article 127).<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What insolvency proceedings are available in the jurisdiction? Does management continue to operate the business and \/ or is the debtor subject to supervision? What roles do the court and other stakeholders play? How long does the process usually take to complete?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Law 4738\/2020 provides for two types of bankruptcy:<\/p>\n<p>(a) Small-scale bankruptcy (Articles 172\u2013188): a simplified procedure for individuals with total immovable assets of up to \u20ac450,000, or for micro legal entities as defined in Article 2 of Law 4308\/2014 (total assets of up to \u20ac450,000; net turnover of up to \u20ac900,000; and an average headcount during the financial year of up to ten (10) employees).<\/p>\n<p>(b) Ordinary bankruptcy (Articles 75\u2013171): for all other individuals or legal entities. In the case of legal entities, the bankruptcy petition may include a request for either (i) the sale of the business as a whole or of its operating units, or (ii) the sale of individual assets.<\/p>\n<p>The bankruptcy petition may be filed by one or more creditors having a legal interest, by the public prosecutor at the court of first instance where justified on grounds of public interest, or by the debtor or the debtor\u2019s directors\/managers (in the case of a legal entity) (Article 179). Bankruptcy is thus declared by the court, which also supervises the proceedings as a whole, while the Creditors\u2019 Meeting is responsible, inter alia, for approving agreements in the context of the sale of the assets of the bankruptcy estate and for overseeing the conduct of the Bankruptcy trustee. Following the declaration of bankruptcy, the debtor is automatically divested of the administration (management and disposal) of its property, which is thereafter exercised exclusively by the Bankruptcy trustee. Upon request, and provided that the Creditors\u2019 Meeting consents, the court may authorise the continued operation of the business by the debtor and its directors (Article 94).<\/p>\n<p>Ordinary bankruptcy takes, on average, two to five (2\u20135) years to complete, although complex cases may extend considerably, while small-scale bankruptcy may take as little as one (1) year.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What form of stay or moratorium applies in insolvency proceedings against the continuation of legal proceedings or the enforcement of creditors\u2019 claims? Does that stay or moratorium have extraterritorial effect? In what circumstances may creditors benefit from any exceptions to such stay or moratorium?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Upon the declaration of bankruptcy, all individual enforcement measures taken by bankruptcy creditors against the debtor in satisfaction of their bankruptcy claims are automatically stayed, pursuant to Article 100 of Law 4738\/2020.<\/p>\n<p>This automatic stay does not apply to secured creditors in respect of the secured assets of the bankruptcy estate during the first nine (9) months following the declaration of bankruptcy. Upon expiry of that nine-month period, the stay extends to all individual enforcement actions, including those brought by secured creditors. By way of exception, individual enforcement actions by secured creditors are also stayed during the aforementioned nine-month period where the court\u2019s decision provides for the sale of the business as a whole.<\/p>\n<p>The automatic stay has no extraterritorial effect by operation of Greek law alone. Where bankruptcy has been declared by a court of an EU Member State (other than Denmark) that has established its international jurisdiction pursuant to Article 3 of Regulation (EU) 2015\/848, the stay referred to above may nonetheless take effect in accordance with the provisions of that Regulation.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do the creditors, and more generally any affected parties, proceed in such proceedings? What are the requirements and forms governing the adoption of any reorganisation plan (if any)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Pursuant to Articles 152\u2013153 of Law 4738\/2020, following the declaration of bankruptcy, creditors must lodge their claims within three (3) months of the declaration in order to participate in the verification process. By way of exception, the State may lodge its claims without any time limit until the final distribution list is drawn up. Creditors who have failed to lodge their claims within the prescribed period may, by filing a statement of opposition at their own expense, seek verification of their claims from the bankruptcy court. Bankruptcy proceedings no longer provide for a reorganisation plan following the enactment of Law 4738\/2020.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How do creditors and other stakeholders rank on an insolvency of a debtor? Do any stakeholders enjoy particular priority (e.g. employees, pension liabilities, DIP financing)? Could the claims of any class of creditor be subordinated (e.g. recognition of subordination agreement)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>As regards the ranking of creditors, Articles 975\u2013978 of the Code of Civil Procedure apply mutatis mutandis (Article 167 of the Insolvency Code). The \u201cRehabilitation Privilege\u201d, however, is satisfied in priority; it concerns claims arising from financing, benefits and services provided in the context of a Rehabilitation Agreement or of the negotiations for its conclusion.<\/p>\n<p>Furthermore, where a claim arose after 17 January 2018 and is secured by a pledge, mortgage or preliminary mortgage over an asset that was previously unencumbered, the order of priority is as follows: (a) employment claims in respect of unpaid wages for up to six months; (b) claims benefiting from the Rehabilitation Privilege; (c) creditors holding special security interests; (d) generally privileged creditors; and (e) unsecured creditors.<\/p>\n<p>Where Article 977A of the Code of Civil Procedure does not apply, Article 977 applies, providing for the distribution of the distributable estate among generally privileged creditors, creditors holding special security interests and unsecured creditors, following the full satisfaction of claims benefiting from the Rehabilitation Privilege. In the most common bankruptcy scenario, where creditors holding special security interests, generally privileged creditors and unsecured creditors concur, they receive 65%, 25% and 10% of the distributable estate respectively.<\/p>\n<p>In the Greek legal system, statutory recognition of creditor subordination agreements is found in the law governing bond loans: Article 60(2)(d) of Law 4548\/2018 permits an agreement that bondholders be satisfied after the issuer\u2019s other creditors, or after a particular class of creditors. A similar possibility exists within the framework of the rehabilitation procedure. Procedural agreements are likewise not excluded, whereby a creditor undertakes not to exercise the preferential position conferred by security in rem until another creditor has been satisfied. Finally, in the case of the nominal undercapitalisation of a public limited company (soci\u00e9t\u00e9 anonyme), where shareholders provide financing by way of shareholder loans rather than equity contributions, the claims of such creditor-shareholders are treated as subordinated claims, to be satisfied after those of unsecured creditors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can a debtor\u2019s pre-insolvency transactions be challenged? If so, by whom, when and on what grounds? What is the effect of a successful challenge and how are the rights of third parties impacted?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Acts performed by the debtor prior to insolvency may be challenged by means of bankruptcy avoidance (Articles 116\u2013126 of the Insolvency Code).<\/p>\n<p>The Insolvency Code distinguishes three categories of acts. First, acts subject to mandatory avoidance (Article 117), which are deemed detrimental by irrebuttable presumption: gifts and gratuitous dispositions, the payment of debts not yet due, the irregular payment of due debts, and the granting of security for pre-existing debts. Secondly, voidable acts (Article 118), which may be set aside provided that the counterparty knew, or could have foreseen, that the act was detrimental to the creditors. Thirdly, acts amounting to fraudulent conveyance (Article 119) carried out within the five years preceding the declaration of bankruptcy, where the debtor acted with intent to defraud and the counterparty was aware of that fraud.<\/p>\n<p>The trustee is actively authorized to bring the avoidance action and, under specific conditions, so too may the creditors. Such actions may be brought against the parties to the transaction, their universal successors, and any singular successor who acquired rights in bad faith.<\/p>\n<p>A successful avoidance gives rise to an obligation on the part of the counterparty to restore the asset to the bankruptcy estate; where restitution is impossible, the rules on unjust enrichment apply.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are existing contracts treated in restructuring and insolvency processes? Are the parties obliged to continue to perform their obligations? Will termination, retention of title and set-off provisions in these contracts remain enforceable? Is there any ability for either party to disclaim the contract?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In restructuring processes pending (executory) contracts generally remain in force, and the parties remain bound to perform them, unless the contract provides otherwise.<\/p>\n<p>In bankruptcy, by contrast, their fate (Articles 103\u2013111 of the Insolvency Code) depends on the method of asset liquidation: where assets are liquidated individually, the contracts are automatically terminated on the sixtieth (60th) day following the declaration of bankruptcy, without any termination penalty, unless the Bankruptcy trustee declares their continuation. Where the business is sold as a whole, they continue in the ordinary course, unless the trustee elects to terminate them.<\/p>\n<p>Ipso facto clauses (providing for the automatic termination or cancellation of a contract by reason of insolvency) are void (Articles 106 and 171(5) of the Insolvency Code). Contractual clauses conferring a right of termination are, in principle, enforceable, but their exercise is subject to scrutiny under Article 281 of the Civil Code (abuse of rights).<\/p>\n<p>As regards retention-of-title arrangements (Article 532 of the Civil Code), the Insolvency Code protects both parties, preserving their respective rights notwithstanding the declaration of bankruptcy. Where the debtor was the buyer, the seller may set a reasonable time limit within which the Bankruptcy Trustee must elect whether to perform the contract; if the trustee declines, the seller may reclaim the asset from the bankruptcy estate without any need for prior rescission of the contract (Article 110 of the Insolvency Code).<\/p>\n<p>Finally, set-off (Article 111) is permitted where its conditions were satisfied prior to bankruptcy. Contractual set-off is prohibited (unless effected by way of a settlement under Article 145), with the exception of close-out netting clauses in financial contracts.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What conditions apply to the sale of assets \/ the entire business in a restructuring or insolvency process? Does the purchaser acquire the assets \u201cfree and clear\u201d of claims and liabilities? Can security be released without creditor consent? Is credit bidding permitted? Are pre-packaged sales possible?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the case of a transfer of the business under a Rehabilitation Agreement, the purchaser acquires the transferred assets and assumes only those liabilities expressly provided for in the Rehabilitation Agreement.<\/p>\n<p>In bankruptcy, where individual assets are sold, the sale is conducted privately by way of an electronic auction (Article 162 of the Insolvency Code). Likewise, where it is decided to sell the business or an operating unit, the Bankruptcy trustee conducts a public tender (competitive bidding) auction. The purchaser acquires the assets free and clear of all encumbrances, attachments, preferential rights and security interests.<\/p>\n<p>As for credit bidding, it is not provided for as a general right in bankruptcy liquidation, since payment of a price is required within the competitive bidding process. In rehabilitation proceedings, however, a comparable result may be achieved through the contribution by creditors of their claims to a company acquiring the business. Finally, \u2018pre-packaged sale\u2019 arrangements may be implemented through the rehabilitation procedure, whereby the transfer of the business is agreed in advance of the court\u2019s ratification.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What duties and liabilities should directors and officers be mindful of when managing a distressed debtor? What are the consequences of breach of duty? Is there any scope for other parties (e.g. director, partner, shareholder, lender) to incur liability for the debts of an insolvent debtor and if so can they be covered by insurances?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Once the debtor enters a period of financial distress or insolvency, the business judgment rule \u2014 which requires directors to act in good faith, on an informed basis and in the best interests of the company \u2014 must be applied having regard also to the interests of creditors. A breach of these duties may give rise to civil liability, in particular where management unjustifiably increases the company\u2019s liabilities, disposes of assets without a prudent valuation, or grants preferential treatment to particular creditors. In more serious cases, criminal liability may also arise \u2014 for example, for breach of trust, bankruptcy offences or the preferential treatment of a creditor. Law 4738\/2020 specifically provides for bankruptcy offences, such as fraudulent bankruptcy, the preferential treatment of creditors, and the criminal liability of third parties or managers of legal entities.<\/p>\n<p>Shareholders are, as a rule, not liable, save in exceptional cases involving abuse of the separate legal personality of the entity.<\/p>\n<p>As regards insurance, in practice the relevant risks may be mitigated through directors\u2019 and officers\u2019 liability insurance (D&amp;O insurance). Fraud, unlawful gains, fines and criminal penalties are generally uninsurable, as are acts committed in the knowledge of their unlawfulness and are accordingly excluded from cover.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do restructuring or insolvency proceedings have the effect of releasing directors and other stakeholders from liability for previous actions and decisions? In which context could the liability of the directors be sought?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The personal liability of a company&#8217;s directors or managers may arise in respect of specific debts owed to the Tax Authority and e-EFKA (the Unified Social Security Fund), pursuant to the Code of Tax Procedure and social security legislation. In the case of the Rehabilitation Agreement, the rights of creditors against co-debtors \u2014 including directors who bear joint and several liability \u2014 are reduced to the amount recoverable from the debtor only where the creditor expressly consents. By contrast, under the Out-of-Court Workout Mechanism, the effects of the debt-restructuring agreement extend automatically to any directors as well. In the case of bankruptcy, in respect of such debts specifically, where they arose within the suspect period or within the thirty-six (36) months preceding it, the legal representative of the legal entity may be discharged from liability under Article 195 of the Insolvency Code. In such a case, the creditor may challenge the discharge in the circumstances provided for by law, in particular where the debtor did not act in good faith at the time of the declaration of bankruptcy or in the course of the proceedings, failed to cooperate with the organs of the bankruptcy proceedings, or has been convicted of certain criminal offences. Liability of the members of the management body may also arise in the event of a failure to file a timely bankruptcy petition, or where the state of cessation of payments was brought about by their fraud or gross negligence, pursuant to Article 127 of the Insolvency Code.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Will a local court recognise foreign restructuring or insolvency proceedings over a local debtor? What is the process and test for achieving such recognition? Does recognition depend on the COMI of the debtor and\/or the governing law of the debt to be compromised? Has the UNCITRAL Model Law on Cross Border Insolvency or the UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments been adopted or is it under consideration in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Greek courts distinguish between proceedings originating within the European Union and those originating in third countries. For EU Member States (excluding Denmark), recognition of a judgment opening insolvency proceedings is automatic and immediate under Regulation (EU) 2015\/848, on the basis of the principle of mutual trust. Recognition is conditional upon the debtor\u2019s centre of main interests (\u201cCOMI\u201d) being located in the State of origin, since the COMI determines jurisdictional competence. There is a presumption that a company\u2019s COMI is situated at its registered office, rebuttable by objective factors ascertainable by third parties. A public-policy exception (ordre public) exists but is applied restrictively.<\/p>\n<p>For proceedings outside the EU, recognition is governed by Law 3858\/2010, which incorporated the 1997 UNCITRAL Model Law on Cross-Border Insolvency into Greek law. This framework requires a formal application to the competent Greek court and does not operate automatically. Unlike Regulation (EU) 2015\/848, it contains no annex listing, by State, the proceedings falling within the Model Law. The Greek court must assess whether the foreign proceeding constitutes a collective judicial or administrative proceeding \u2014 including interim insolvency-related measures \u2014 that is predicated on the debtor\u2019s insolvency and entails both the divestment of the debtor\u2019s control over its assets and the appointment of a foreign representative (liquidator). This exhaustive list of recognition requirements does not preclude an examination of whether the effects of recognition are compatible with Greek public policy.<\/p>\n<p>The Greek implementing legislation is notably more restrictive than the original UNCITRAL Model Law, in that it specifically requires proof of a state of insolvency, the appointment of a foreign representative, and the divestment of the debtor. While Greece has adopted the 1997 Model Law, it has not yet adopted the 2018 UNCITRAL Model Law on Recognition and Enforcement of Insolvency-Related Judgments.<\/p>\n<p>Proceedings falling outside the scope of\u00a0 3858\/2010 are recognised under the procedure provided for in Article 780 of the Greek Code of Civil Procedure.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">For EU countries only: Have there been any challenges to the recognition of English proceedings in your jurisdiction following the Brexit implementation date? If yes, please provide details.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No challenge to the recognition of English insolvency proceedings has, to date, arisen in the published case law of the Greek courts; the post-Brexit framework has, however, given rise to considerable practical uncertainty, as outlined below.<\/p>\n<p>Since 1 January 2021, UK insolvency proceedings no longer benefit from automatic recognition under the EU Regulation. UK insolvency representatives seeking recognition in Greece must now proceed either under the judicial process established by Law 3858\/2010 or, alternatively, under Article 780 of the Code of Civil Procedure.<\/p>\n<p>This change is particularly significant for schemes of arrangement, which are grounded in company law (Part 26 of the Companies Act 2006) rather than in insolvency legislation and were, in any event, already excluded from Annex A to the Regulation, being formally classified as company-law rather than insolvency-law instruments.<\/p>\n<p>Under the Greek implementation of the UNCITRAL Model Law, a proceeding may qualify as an insolvency proceeding even where it is governed by company law rather than insolvency legislation \u2014 a notably broader scope than that afforded by the EU Regulation. Accordingly, schemes of arrangement may be eligible for recognition under Law 3858\/2010, provided that the criteria of insolvency, collective character and some degree of divestment of the debtor\u2019s assets can be established on the facts of the particular case.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can debtors incorporated elsewhere enter into restructuring or insolvency proceedings in the jurisdiction? What are the eligibility requirements? Are there any restrictions? Which country does your jurisdiction have the most cross-border problems with?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Debtors incorporated in other jurisdictions may enter restructuring or insolvency proceedings in Greece provided that their centre of main interests (COMI) is located in Greece. The court determines the COMI by reference to the place where the debtor conducts the administration of its interests on a regular basis and in a manner ascertainable by third parties.<\/p>\n<p>In the case of legal persons, the COMI is presumed to be the place of the registered office. In order to prevent abusive forum shopping, this presumption applies only where the registered office has not been transferred to another Member State within the three-month period preceding the filing of the application to open insolvency proceedings.<\/p>\n<p>Secondary or territorial proceedings may also be opened in Greece where a foreign debtor maintains an establishment there, even if its COMI is situated in another jurisdiction. Such secondary proceedings are confined in scope to assets situated in Greece and are generally subordinate to the main proceedings opened in the jurisdiction of the debtor\u2019s COMI.<\/p>\n<p>In practice, cross-border issues arise most frequently in connection with debtors having links to Cyprus and the United Kingdom.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are groups of companies treated on the restructuring or insolvency of one or more members of that group? Is there scope for cooperation between office holders? For EU countries only: Have there been any changes in the consideration granted to groups of companies following the transposition of Directive 2019\/1023?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Greece adheres strictly to the principle of separate legal personality, commonly encapsulated in the rule \u201cone legal entity, one bankruptcy proceeding\u201d. Accordingly, each group entity must independently satisfy the statutory conditions for the opening of insolvency proceedings. For EU-based groups, Chapter V of Regulation (EU) 2015\/848 provides a framework for cooperation between insolvency practitioners and courts, including the possibility of initiating a group coordination proceeding, while preserving the independence of each member\u2019s estate. As regards cooperation between office holders, Law 3858\/2010, implementing the UNCITRAL Model Law, provides a basis for cooperation with foreign representatives in proceedings involving non-EU group members. In practice, however, formal mechanisms of cooperation between office holders remain largely untested before the Greek courts. Directive (EU) 2019\/1023, as transposed into Greek law by Law 4738\/2020, contains no express provisions on the restructuring of corporate groups, and no specific legislative amendments have been introduced to address the coordination of group-wide preventive restructuring procedures. In practice, where several Greek group companies are subject to insolvency proceedings, the petitions are typically filed before the same court on the basis of a shared COMI, thereby facilitating de facto procedural coordination at the level of the supervising court.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your country considering adoption of the UNCITRAL Model Law on Enterprise Group Insolvency?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Greece has not yet adopted the UNCITRAL Model Law on Enterprise Group Insolvency, and there are at present no discussions regarding its adoption.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any proposed or upcoming changes to the restructuring \/ insolvency regime in your country?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Real Estate Acquisition and Leaseback Agency will be a private entity, selected by the State through an international public tender. The Agency will acquire the debtor\u2019s primary residence and will be required to lease it back to the debtor for a period of twelve (12) years, thereby preventing the evictions that would otherwise follow upon acquisition by a third party. It is expected to commence operations in late 2026.<\/p>\n<p>Furthermore, significant amendments to the Out-of-Court Workout Mechanism are introduced by a bill expected to be enacted in the near future. In particular, provision is made for a separate proposal based solely on the value of the debtor\u2019s primary residence, coupled with the simultaneous liquidation of all remaining immovable property. It is further provided that the debt-restructuring agreement will constitute an enforceable title against each creditor bound by it. Finally, the minimum aggregate indebtedness threshold for accessing the Out-of-Court Workout Mechanism is reduced from EUR 10,000 to EUR 5,000.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is your jurisdiction debtor or creditor friendly and was it always the case?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Greek insolvency law, as structured under Law 4738\/2020, is creditor-friendly. This is reflected, among other things, in the following features: there is no protection of the bankrupt debtor\u2019s primary residence, the debtor being able to retain occupation of the primary residence only as a tenant in specific circumstances, with an option to repurchase it from the Real Estate Acquisition and Leaseback Agency. The law provides for the expeditious liquidation of the debtor\u2019s assets in bankruptcy, commencing even before the verification of claims. The creditor-friendly character of the framework is equally apparent in the restructuring procedures, which are optional for creditors \u2014 save in the case of vulnerable and eligible debtors under the Out-of-Court Workout Mechanism. Moreover, under the forthcoming amendments to the Out-of-Court Workout Mechanism, the debt-restructuring agreement will constitute an enforceable title against all creditors bound by its terms.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Do sociopolitical factors give additional influence to certain stakeholders in restructurings or insolvencies in the jurisdiction (e.g. pressure around employees or pensions)? What role does the State play in relation to a distressed business (e.g. availability of state support)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Sociopolitical considerations have exerted considerable influence on the design of the restructuring and insolvency proceedings, as evidenced by the special treatment afforded to employee claims. In rehabilitation proceedings, derogations from the principle of pari passu treatment of creditors are expressly permitted in respect of, among others, claims whose satisfaction is necessary to secure the basic subsistence of the creditor and his or her dependants, as well as employment-related claims. In addition, a general priority in favour of employee claims is recognised in the liquidation of assets in bankruptcy. Sociopolitical considerations have likewise shaped the rules on the binding nature, for certain categories of debtors, of the proposal generated by the computational tool under the Out-of-Court Workout Mechanism, as well as the provisions governing the Real Estate Acquisition and Leaseback Agency in respect of the bankrupt debtor\u2019s primary residence. The role of the State in these proceedings has been significantly curtailed. In the restructuring procedures, the deemed acceptance by public bodies of the terms of the restructuring is provided for \u2014 subject to specific conditions \u2014 both in the context of the Rehabilitation Agreement and in respect of proposals submitted under the Out-of-Court Workout Mechanism. No State aid is available within these procedures, save for the limited financial support provided to qualifying vulnerable individual debtors under the Out-of-Court Workout Mechanism, exclusively in connection with the repayment of the mortgage loan over their primary residence.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the greatest barriers to efficient and effective restructurings and insolvencies in the jurisdiction? Are there any proposals for reform to counter any such barriers?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most significant impediment to the efficient conduct of bankruptcy and rehabilitation proceedings is the delay in the issuance of judicial decisions. Similarly, in the context of the Out-of-Court Workout Mechanism, there are material delays in the review and assessment of restructuring proposals by public-sector creditors. With a view to reducing adjudication times and improving judicial efficiency, significant procedural reforms have been enacted by Laws 5108\/2024 and 5134\/2024.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">5956<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/143632","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=143632"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}