Recent Reforms: Effects Of Bankruptcy On Contracts

Recent reforms: effects of bankruptcy on contracts¹

The recently enacted L. 4738/2020 on "Debt settlement and second chance providence"² (the "Insolvency Code") has been amended lately, inter alia, by L. 4818/2021. The amending law introduced various changes on the Insolvency Code's articles relevant to the effects of bankruptcy on contracts (art. 103-111 of the Insolvency Code).

Under the current legal framework, the effects of bankruptcy on contracts depend directly on the court decision declaring the bankruptcy since the relevant provisions of the Insolvency Code reserve different treatment if the liquidation of the debtor's assets is substantiated, according to the relevant court decision, (a) on an itemised basis or (b) through the sale of all company's assets as an operating group. In particular: