Since the financial crisis in Greece began there has been an evolution of legislative initiatives regarding pre-insolvency procedures addressing the need to lift barriers to efficient restructuring of Greek businesses. This May the Greek legislature introduced a new process of extra-judicial settlement of debts expected to become effective August 3, 2017. Ally Law member Your Legal Partners, based in Athens, published a primer on the new law addressing its basic requirements and practice.
As set forth in the primer, the new law provides a process of extra-judicial settlement of debts generating from a debtor’s business activities, as well as covering debts arising from activities arising from outside-business activities to the extent that the restructuring of such debts is judged necessary to sustain the debtor’s business. The law enables (a) natural person traders subject to bankruptcy and (b) legal entities which earn income through business activities to submit an application for extra-judicial debt settlement. The law defines exactly what entities and persons are covered by the law, and sets forth the prerequisites and procedures for filing an application. For instance, qualifying debts must be against a financing institution and must exceed 20,000 euros.
Among the new mechanisms introduced is that of a coordinator appointed from a special registry kept by the Secretariat of Administration of Private Debt. The coordinator has specific responsibilities in the process, and failure to comply with the coordinator’s requests results in cessation of the process and exclusion of the debtor from any similar processes in the future.
The goal of the law is to preserve value, allowing viable businesses to restructure. The process employs new mechanisms previously untested, so some “settling in wrinkles” may be expected and you are encouraged to seek legal counsel to guide you through the system. Debtor and creditor laws in every country are necessarily complex; seek counsel from your Ally Law member firm on the best debt resolution and/or restructuring program for your company in your jurisdiction. For more information about our services in this area, contact us at firstname.lastname@example.org.