The Restructuring Review: Greece

Overview of restructuring and insolvency activity

i Liquidity and state of the financial markets

The sudden impact of the covid-19 pandemic had a negative impact on a rebounding economy in Greece just as it was starting to revive after a near decade-long crisis.2 The country's gross domestic product (GDP) fell 25 per cent during the economic crisis but was on a path to rise 2 to 3 per cent in 2020 and investors were regaining interest under the current governing party 'New Democracy'. Despite the covid-19 pandemic crisis, economic activity in Greece significantly recovered in 2021 as real GDP grew by 8.3 per cent, marking one of the best performances in the euro area. Greek economy is expected to reach a growth rate of 7 per cent at the end of 2022. At the same time, the Greek economy is still struggling to eliminate its budget deficit. Greek economic growth is supported by a booming tourism sector (the country's biggest revenue machine, which brings in as much as 18 to 20 per cent of GDP). The Greek tourism industry took a big hit in 2020 but had a strong rebound in 2021 and is expected to show record growth in 2022. It should also be noted that Greece's sovereign debt is now on a downward trajectory at levels below 200 per cent, in relation to the country's GDP, after a long period.

These developments have contributed to recent upgrades of Greece's credit rating by Standard and Poor's (S&P) and DBRS Morningstar1, thus bringing Greek government bonds to only one notch short of investment grade. Attaining the latter will mark the end of a cycle that began with the onset of Greece's sovereign debt crisis and, at the same time, will be a vote of confidence in Greece that will help attract foreign investments. At the time of writing, Greece's credit ratings are as follows: BB+ (S&P), BBH (DBRS, equivalent to BB+), BB (Fitch) and BA3 (Moody's).3 Key reforms include improvement of fiscal figures, reforms to the Bankruptcy Code, the continuation of the banking sector's recovery through the reduction of non-performing loans (NPLs) and debt restructurings, the introduction of collective dismissals, the opening up of closed professions, boosting of investments and privatisations.

Moreover, the Greek public sector and businesses are in a feverish phase of digital reform funded by the Greek Recovery and Resilience Facility (the Greek part of the EU's response to the covid-19 crisis), which aims to establish a set of ambitious investments and reforms, primarily in the fields of business and public sector digitalisation, fast broadband, 5G, green infrastructure to increase use of renewable energy resources and energy upgrade of buildings, etc., with projected total disbursements of €30.5 billion over 2021 to 2026.

The banking sector continues to be closely watched, as the three recapitalisations and the ongoing liquidity support from the European Central Bank (ECB) and the Bank of Greece have not been enough to strengthen their financial performance. Following the issuance of a legal framework4 on the establishment and operation of credit servicing firms by the executive committee of the Bank of Greece, Greek systemic banks have become very active on taking measures to handle NPLs as well as non-performing exposures (NPEs), such as implementing internal procedures or outsourcing such services to third parties.

This activity is supported by the new legislation5 that releases managers, directors and any other person entrusted with the management of a banking institution's estate from any liability arising therefrom within the scope of a restructuring, rehabilitation, special administration procedure, or haircut of debts and claims. Finally, provision of financial support has also been relatively low, thus making it very hard, if not highly unlikely, for small and medium-sized enterprises (SMEs), which dominate the Greek economy, to gain access to financial help from the banks. An exception to this practice has recently been noticed within the scope of a restructuring procedure, in which case the banks rely on a well-drafted business plan and are more willing to proceed with a refinancing of the existing debts, especially in view of the preferential ranking of claims arising from such agreements. It should be noted that two systemic banks achieved their operational targets of single-digit NPL ratios by the end of 2021, and given ongoing NPL management actions, the entire Greek banking sector should achieve single-digit NPL ratios by the end of 2022. Overall, NPLs have dropped by 82.8 per cent, or €88.8 billion, from their March 2016 peak. The NPL stock reduction in 2021 was mainly driven by loan securitisations. Nonetheless, the NPL ratio of the Greek banking sector remains elevated and well above the EU average (2 per cent in December 2021). As a result, banks must step up efforts towards reducing the NPL stock, particularly against the background of new emerging challenges. This renders the swift and full recognition of any new NPLs on banks' balance sheets an immediate priority for improving the resilience of the banking sector.

The liquidity and asset quality of the Greek financial system improved in the course of 2021, underpinning the financing of the real economy. The continuation of the ECB's accommodative monetary policy measures ensured Greek banks' uninterrupted access to low-cost funding. In addition, the recent ECB Governing Council decision to continue to accept Greek government bonds (GGBs) as eligible collateral in its monetary policy operations (coupled with their acceptance in reinvestments under the Pandemic Emergency Purchase Programme), despite the gradual lifting of pandemic-related support measures, creates favourable financing conditions over the medium term. Banks accelerated their balance sheet clean-up, achieving a substantial reduction in the stock of NPL. However, the persistently high legacy stock of NPLs remains a significant challenge, along with the potential emergence of new NPLs after the full withdrawal of pandemic-related support measures. Implementing appropriate macroprudential policy measures, mainly in the form of capital buffers over the medium term, will help create sufficient macroprudential space that will positively affect financial stability. Banks' initiatives to boost their capital base are a positive step towards mitigating emerging pressures. Increased financing of the real economy is a prerequisite for a sustained economic recovery and calls for a strong banking sector. Hence, efforts to address the above challenges must be stepped up to considerably boost the provision of credit to the real economy.

The repercussions of the war in Ukraine constitute an additional source of uncertainty surrounding banks' asset quality in 2022 because of falling household disposable income and rising business operating costs. In this context, banks' capital adequacy, which is directly affected by balance sheet clean-up and the phasing in of International Financial Reporting Standard 9 (IFRS 9), in conjunction with the low quality of regulatory capital due to the high share of deferred tax credit, and structurally low operating profitability, are posing challenges to Greek banks.

Regarding the need to extend more credit to the real economy, it should be noted that overall financing will greatly depend on the availability of viable investment projects. Consequently, banks are accelerating their business plans to provide credit to healthy enterprises, concurrently with the use of NextGenerationEU funds, and households, by applying prudent credit standards. At the same time, they have to further develop alternative income sources in the context of a more efficient management of savings. Accelerating banks' digitalisation will be another step in this direction.

Changes were introduced by the new Bankruptcy Law (Law 4738/2020), which overhauls the legal framework for addressing insolvency, collective satisfaction of creditors and discharge of debt for any person who undertakes an economic activity by providing economic actors with a second chance.

ii Impact of specific regional or global events

The covid-19 pandemic and Brexit (the United Kingdom's exit from the European Union) created new conditions in 2020 and 2021. Although it is very hard to quantify the exact consequences of Brexit, both political and financial, no one can claim that this will be an easy path for either side.

Among other things, trade and manufacturing as well as financial services are affected, since Britain is now considered a third country and thus tariffs are imposed on imports and exports. Regarding financial services, Britain may also lose its 'passporting rights', which currently allow UK-based institutions to provide services to the European Union without having a branch in another Member State. The loss of such rights might lead UK-based banks to establish subsidiaries in the European Union to process business there regardless of the fact that such work may be done in London.6 This outcome could also be positive for Greece and its maritime economy, as many shipowners cooperate with British banks and could lead to an increased presence of British banks and bank services on Greek territory.

In 2022, the Russian invasion of Ukraine and the ensuing energy crisis are causing a significant adverse effect on economic conditions, weakening short-term growth prospects. Inflationary pressures, mainly fuelled by the energy crisis, compounded by the uncertainty surrounding the duration of the war and its impact on the real economy, are acting as a deterrent to economic decisions on the part of businesses and households. Given the high degree of uncertainty surrounding the outcome and duration of the war and the expected full withdrawal of pandemic-related support measures to borrowers in the course of 2022, a slowdown of the economy (and a new wave of NPLs) cannot be ruled out, especially if the geopolitical crisis is prolonged or escalates further. 7

iii Market trends in restructuring procedures and techniques

A large number of medium-sized companies proceed with informal and out-of-court restructuring following a mutually agreed business recovery scheme with the banks, under which the banks have become involved or take over the debtor's management and look for a potential investor. This is heavily applied to outward-looking companies that have increased export activity, such as those of the aquaculture industry, or those that have good potential to remain sustainable and regain their profitability because of their financial contribution to the Greek market, such as companies in the food industry (mainly supermarkets). Small companies usually apply for a formal restructuring procedure, which is typically a longer and costlier process.

Although the competent authorities do not regularly issue a report regarding insolvency statistics, the Hellenic Statistical Authority recently published some figures referring only to the bankruptcy procedure for 2019. According to these statistics,8 the bankruptcies declared in 2019 amount to 63, whereas in 2018 they amounted to 82. There was therefore a decrease of 23.2 per cent. Moreover, of these statistics, 21 declared bankruptcies concern sole proprietorships, 10 partnerships and 31 capital companies. The most bankruptcies in 2019 were recorded in the retail and wholesale industries – repair of motor vehicles and motorcycles (38.1 per cent), the manufacturing industry (23.8 per cent), the hotel and food services industry (15.9 per cent) and the infrastructure industry (6.3 per cent).

General introduction to the restructuring and insolvency legal framework

i Debtors

Greek law provides a series of insolvency and pre-insolvency procedures to which a Greek-seated company or an individual may be subject on its own initiative or at the initiative of its creditors.

More specifically, the main insolvency processes are provided for and regulated by the provisions of the Law on Debt Settlement and Facilitation of a Second Chance (Law 4738/2020), which entered into force on 1 March 2021 as slightly amended by Law 4818/2021 (the Bankruptcy Law). This Greek legislation transposes the provisions of Directive 2019/1023 of the European Parliament and of the Council on preventive restructuring frameworks, on discharge of debt and disqualifications and on measures to increase the efficiency of procedures concerning restructuring, insolvency and discharge of debt, and amending Directive 2017/1132 on restructuring and insolvency. The Greek legislator adopts a pro-creditor approach, as the main purpose of the insolvency is the collective satisfaction of the debtor's claims.9 The new Bankruptcy Law replaced and abolished Law 3588/2007 as well as the vast majority of the pre-existing debt settlement and restructuring mechanisms mentioned in Law 4307/2014 regarding special administration and No. 3869/2010 on indebted households. The main processes are outlined as follows:

  1. bankruptcy proceedings – voluntary liquidation;
  2. bankruptcy proceedings – involuntary liquidation;
  3. liquidation procedure in detail;
  4. restructuring procedure;
  5. extrajudicial debt settlement – pre-bankruptcy proceeding; and
  6. early warning mechanism – pre-bankruptcy proceeding.

Bankruptcy proceedings – voluntary liquidation

According to the Bankruptcy Law, both individuals, irrespective of whether or not they are engaged in commercial activities, and legal persons who pursue an economic purpose may be subject to bankruptcy proceedings. On the contrary, legal entities governed by public law, local government bodies and public sector institutions are not eligible for bankruptcy.

Voluntary liquidation is commenced by the debtor and in cases of a legal person by its board of directors or a relevant management body. The debtor must file a bankruptcy petition before the Multi-Member Court of First Instance10 within 30 days of a cessation of payments, in a general and permanent way. The Bankruptcy Law establishes some objective presumptions to define the conditions for the cessation of payments. This is the case when the debtor does not pay monetary obligations due to the state, social security institutions, or credit or financial institutions amounting to at least 40 per cent of their total liabilities due for a period of at least six months, if the non-performing debt exceeds the amount of €30,000. The selective fulfilment of monetary obligations due does not lift the state of cessation of payments, which might even consist of the failure to meet even one significant financial debt. Such a presumption is deemed rebuttable.

Moreover, the Bankruptcy Law provides that voluntary liquidation can be filed anytime in the case of a debtor's imminent inability to perform their liabilities.11 A general and permanent inability of the legal entity to satisfy monetary obligations as they become due and payable may be present or imminent; essentially, a foreseeable result of illiquidity. In any case, present or imminent inability or possibility of insolvency, as the case may be, must exist at the time of the filing of the bankruptcy petition. Regardless of the existence of any of the aforementioned criteria, bankruptcy will not be declared if the court, based on the financial data submitted, believes that the assets or the income of the debtor cannot cover the bankruptcy's expenses.

Once the court declares a legal entity bankrupt, the entity is placed in receivership. The bankruptcy petition shall nominate the proposed insolvency administrator and be accompanied by the written statement of the latter that they accept the appointment and that no impediments exist regarding their appointment. Such a nomination is not required if the bankruptcy petition includes a debtor's statement that they did not manage to appoint an insolvency administrator. After the declaration of the bankruptcy and according to Article 137 the court appoints a certified insolvency practitioner (syndic or insolvency administrator) to start the liquidation proceedings and manage the debtor's assets and liabilities. On request of the debtor, the court may also appoint the legal entity's management body or the debtor themselves in the case of natural persons (debtor in possession) with or without restrictive conditions, who shall manage the assets and liabilities, along with the insolvency practitioner, following the relevant consent of the union of the creditors. On request of the insolvency practitioner, the court may remove the debtor from the administration of its property, if this serves the creditors' interest. In this case, the insolvency practitioner is solely competent for the management of the debtor's property.

The court, finally, designates the date that the present cessation of payments occurred, which is presumed to be the 30th calendar day preceding the submission of the bankruptcy petition, and in cases of imminent cessation of payments is the date when the relevant petition was filed.12 However, if it is speculated on the basis of the information available that the debtor has been unable to serve their monetary obligations due in a general and permanent manner from an earlier date, the court will set this earlier date as the day of cessation of payments. The latter cannot be more than two years prior to the date of the declaration of the bankruptcy or in the event of the debtor's death beyond the year before the death occurred.

The declaration of bankruptcy has the following significant results:

  1. the acknowledgment of the debtor's assets that exist at the time of bankruptcy declaration as 'non-exempt' property that is required for liquidation purposes. The latter includes all the assets belonging to the debtor, irrespective of their location;
  2. any claim not due at that time becomes immediately payable. An exception is provided only for the claims of secured creditors, which become payable on the date of their expiry. Claims not due are reduced by the amount of legal interest corresponding to the time period from the declaration of the bankruptcy to the date they become due; and
  3. the suspension of all individual enforcement actions and proceedings, either future or existing, against the debtor and the legal representatives in cases of legal persons.

Bankruptcy proceedings – involuntary liquidation

Involuntary liquidation is commenced either by any creditor with a relevant legitimate interest in cases of present cessation of payments or by the prosecutor for reasons of public interest (very rare in practice). The time and procedure of filing are the same as those of voluntary liquidation.

Liquidation procedure in detail

Pursuant to the previous Bankruptcy Code (Articles 107–131) either the debtor or the creditors could file a reorganisation plan along with the bankruptcy petition under certain conditions. However, the new Bankruptcy Law does not provide for such a procedure due to the lack of practical application of the latter. The Bankruptcy Law provides instead only for the immediate liquidation of the debtor's assets. This aims to achieve the rapid return of productive means to potentially productive uses.

More specifically, the insolvency practitioner proceeds to the inventory of the assets of the bankruptcy property. The debtor is invited within certain deadlines to be present during the inventory. The practitioner can appoint an assistant of their choice for the needs of the inventory. Moreover, the latter shall draw up an inventory report of the debtor's total assets, which shall be published without delay and inform the rapporteur about the status of the insolvency property.

Regarding the liabilities of the debtor, the latter is obliged to deliver to the practitioner a list of their creditors and the amount of their claims. The insolvency practitioner invites all the creditors to lodge their claims within three months of the publication of the declaration of the bankruptcy. The claims lodged have to be verified by the practitioner within three months from the expiration of the lodgement deadline. Creditors who have not lodged their claims within the above-mentioned deadline and thus are not able to participate in the claims' verification may file an appeal at their own expense within the deadlines required by the Law13 and request the verification of their claims from the Bankruptcy Court, which judges in accordance with the provisions of non-contentious proceedings.

After the completion of the inventory and verification procedures, the liquidation of the debtor's assets takes place. Either the debtor's business in whole or in part in cases of integrated operative units or individual assets are subject to liquidation.

The liquidation of the debtor's assets in whole or in part requires an application or an additional intervention, which has to be submitted by 30 per cent of the creditors, including 20 per cent of secured creditors. This process applies only if the debtor is an entity and the case in question does not concern a bankruptcy of small entities.

The liquidation is conducted through a public e-auction without a minimum price and is administered by a notary public. Within 10 working days from the end of the e-auction, the insolvency practitioner draws up a report, which names the bidder.

Within one month of the e-auction, the creditors' assembly will convene without delay the invitation of the insolvency practitioner to either approve or reject the transaction. In cases of approval, the sale contract is concluded between the insolvency practitioner and the bidder. In cases of rejection and if no further resolution is concluded by the assembly, the liquidation of the debtor's individual assets takes place. If the liquidation has not been completed within 18 months of the declaration of the bankruptcy by the court, the practitioner shall proceed to the liquidation of the individual assets as well.

In this last case, the assets of the insolvency property are sold separately through an e-auction as well. The first bid price is determined by two certified valuators and corresponds to the average price of their assessments. If the first auction does not succeed, the Bankruptcy Law provides for the possibility of holding two e-auctions, each no later than 20 days after the previous e-auction. The first bid price is adjusted accordingly (firstly to three-quarters of the first bid price and secondly to half). In the event of a third fruitless auction, the insolvency practitioner will submit to the rapporteur a request for the reduction of the first bid price or the approval of conditions that will facilitate the sale of the individual assets.

If the sale of the assets is not achieved within 120 days of the issuance of the rapporteur's order, the e-auction is repeated without a first bid price.

It shall be noted that the judge rapporteur shall grant its consent for the transfer of the real estate property of the debtor.

Following the liquidation, the proceeds are distributed to the bankruptcy creditors in accordance with the provisions regulating the priority of their claims.

Restructuring procedure – pre-bankruptcy proceeding

The restructuring procedure is a collective pre-bankruptcy procedure that aims to maintain, rehabilitate, restart and 'rescue' an entity's going concern while safeguarding creditors' best interests. The restructuring procedure applies to every person who carries out business activity or has their main interests in Greece. If the latter is presently or will imminently be unable to perform their monetary obligations due in a general way, or even if the probability of insolvency exists (estimated as such by the court), the creditors' compromise agreement (hereinafter referred to as 'pre-pack deal' or 'restructuring agreement') may be submitted for ratification before the competent court (the Multi-Member Court of First Instance in the district where the debtor has their main interests). This agreement must be approved by the debtor and by at least 50 per cent of the creditors, including 50 per cent of secured creditors.

The restructuring agreement has to be accompanied by a business plan with a duration equal to the duration of the agreement.

The deal must be structured in a manner that would not impair the collective enforcement by all creditors. Namely, the restructuring must not (1) leave the non-participating creditors in a worse position in comparison with the position that they would have been in, in terms of satisfaction of their claims in a plain bankruptcy process, and (2) oblige the non-participating creditors, who are owners of things or assignees of claims and have the right to satisfy their claims against the debtor through such assets (e.g., in leasing and factoring agreements), to receive less than they would have received or will receive by exercising their contractual rights relating to these financial assets.14

The new Bankruptcy Law provides that, from the date of the pre-pack deal submission, until the issuance of the court's decision, all enforcement actions against the debtor are automatically suspended for a maximum period of four months. Such a suspension can occur only once. After the lapse of the four months, suspension is allowed only through a court (interim measure) decision. The date of effect of the above-mentioned suspension is registered with the Electronic Solvency Register. Furthermore, the disposal of the property and equipment of the debtor's enterprise is prohibited, unless they are replaced by others of at least equal value or their disposal concerns their use as collateral in the framework of an interim financing and which is mentioned in the restructuring agreement.

The court decision that rejects the restructuring agreement is subject to appeal before the competent Court of Appeal in accordance with the general provisions of the Code of Civil Procedure. An innovative provision of the new Bankruptcy Law states that both automatic suspension and any further provisional measures may take place only once even before submission of the creditors' compromise agreement for ratification on request of the debtor or one of the creditors if (1) the petitioner produces a written declaration signed by creditors representing at least 20 per cent of the total claims and (2) the conditions of an emergency or imminent danger of the parties are met. Such measures shall be in force until the submission for ratification of the pre-pack deal and in any case for four months from the court's respective order. No extension of such measures can be ordered.

According to Article 34, Paragraph 2 of the Bankruptcy Law, as amended by Article 34, Paragraph 11 of Law 4818/2021, creditors may also submit a pre-pack deal, without the debtor's consent, if (1) such a deal is executed by 50 per cent of the creditors, including 50 per cent of secured creditors, and (2) the debtor is under present cessation of payments.

If the agreement has been approved by the debtor and the creditors in accordance with the provisions of the Bankruptcy Law, the court ratifies the agreement when the following conditions are cumulatively fulfilled:

  1. it is probable that the restructuring agreement ensures the entity's sustainability in a reasonable manner;
  2. it is probable that the principle of non-deterioration of the creditors' position is met;
  3. the restructuring agreement is not the result of fraudulent behaviour and does not violate the provisions of mandatory law and, in particular, those of competition law;
  4. creditors in the same position are treated in line with the principle of equal treatment. Deviations from this principle are allowed only for important business or social reasons, which have to be mentioned specifically in the court decision. Deviations are also allowed if the affected creditor consents; and
  5. the debtor consents to the agreement concluded only by creditors.

Furthermore, the new Bankruptcy Law introduces a new role for the special mandator. The court can also appoint a special mandator on request of the debtor or one of the creditors, who is responsible for certain actions especially for the safeguarding of the debtor's property, the execution of special managerial acts, the signing of executory contracts of the restructuring agreement and the supervision of the implementation of the agreement's individual terms.

Currently, in the case of a pre-pack deal, due to the present cessation of payments, the special mandator appointed by virtue of the ratification decision is entitled to substitute any shareholder or stakeholder in the respective meetings if such a shareholder or stakeholder denies their participation or votes for the approval of actions required under the pre-pack deal either after its submission or as condition precedent.

The special mandator shall exercise the aforementioned rights granted that the shareholder's declared abstention or negative voting impairs the quorum and majority percentages.

The same right (along with its limitations) applies in all other cases of a pre-pack deal ratification, if abstention or negative voting by the shareholder or stakeholder is a result of abusive behaviour.

Extrajudicial debt settlement (pre-bankruptcy proceeding)

The Bankruptcy Law reforms and updates the out-of-court procedure, which was initially regulated by Law 4469/2017. Either the debtor or the creditors may file a petition for an extrajudicial debt settlement. The debtor is able to file the application provided that their total debts to the state, social security institutions and banks (default of payment for at least 90 days) or claims from an amount to €10,000 at least or that 90 per cent of their total liabilities are not owed to a one single financing institution. If this natural or legal person has applied for or has begun a pre- or post-bankruptcy procedure, a special administration or a liquidation, or they have been irrevocably convicted for tax evasion, money laundering, extortion, forgery, bribery, smuggling, fraud or fraud of creditors, then they are not subject to the extrajudicial debt settlement. Moreover, the debtor who has performing debts has to invoke facts that indicate the deterioration of their financial situation by at least 20 per cent. Providers of investment services, undertakings for collective investment in transferable securities, alternative investment funds and their managers, credit and financial institutions, and insurance or reinsurance undertakings are excluded from this extrajudicial mechanism. Debtors who have applied to be subjected to Law 4469/2017 cannot apply for this procedure unless they have waived their previous application with the former law on time.

The petition has to be submitted via the electronic platform of the Special Secretariat (Directory) of Private Debt Management. If the settlement is initiated by the creditors, an invitation to file the petition within 45 calendar days is notified to the debtor. The petition must be accompanied by various documents, such as a creditors' list, a list of all assets and any encumbrances, any affiliated persons, financial statements and various certificates. The required documents differ depending on whether the petition is submitted by a natural or legal person.

The extrajudicial settlement is a multilateral negotiation among the debtor, the creditors, the state and the social security institutions, which takes place via the above-mentioned platform managed by the Ministry of Digital Governance in cooperation with the Special Secretariat of Private Debt Management. During the negotiations, the parties concerned are bound by a duty of confidentiality and truth. An agreement among the parties should be concluded within two months of the submission of the petition. Otherwise, the petition will be rejected.

If the debtor does not abide by the agreed terms, each participating creditor concerned reserves the right to terminate the agreement. The termination of the agreement results in the reinstatement of the debtor's liabilities to the creditor concerned.

On submission of the petition and until the proceedings are terminated in any way, all enforcement actions, the continuation of the enforcement proceedings on claims, movable and immovable property against the debtor, and the criminal prosecution for the offences of being in debt to the state and to third parties and to social security institutions are suspended.

After the petition is submitted, the creditors may submit a restructuring proposal to the debtor. If the debtor and the majority of the creditors in terms of debt nominal value consent, an agreement is reached. This agreement can also be concluded with each creditor in the form of separate bilateral agreements with identical content. The Bankruptcy Law includes several restrictions on the terms of such agreements (e.g., the repayment of debts to the state and social security institutions in more than 240 instalments cannot be agreed).

A subsidy may be granted to vulnerable debtors under specific conditions if the restructuring agreement includes a loan secured with the primary residence of the debtor.

Early warning mechanism – pre-bankruptcy proceeding

The new Bankruptcy Law introduces an electronic early monitoring mechanism, which divides debtors into three levels of insolvency risk, is supervised by the Special Secretariat of the Private Debt Administration and is used to detect potential circumstances of insolvency in advance. This mechanism is activated on request of the debtor concerned and the Supervisory Authority states opinions and proceeds with suggestions to deal with the insolvency risk as appropriate.

Compulsory administration under the Code of Civil Procedure

The Code of Civil Procedure provides that the court may impose a special administration on the real estate property or even the business of the debtor, following a creditor's petition. Such an order is issued only if the creditor's claim is judicially verified and thus the creditor has obtained a respective decision allowing them to enforce their claim against the debtor. The competent court is the Single-Member Court of First Instance of the region where the debtor's property or registered seat of their business is located. The court's decision is subject to appeal. The court appoints an administrator of the property or the business. The debtor can be appointed as administrator if the court considers that this serves the exploitation of the property or the operation of the business. Creditors may be appointed as administrators as well.

The compulsory administration is terminated ipso jure if the debtor is declared insolvent. It should be mentioned that this procedure is not acknowledged as an insolvency or liquidation procedure but as an alternative means granted to the creditor to satisfy their monetary claim. These provisions are not regulated in detail, and therefore initiation of such a procedure is not widely recorded. It appears that special administration is more applicable to very small businesses or merchant individuals.

Nonetheless, in 2013, a large construction company was the first ever debtor to be placed under compulsory administration, following the respective petition of a minority creditor.15 As the court explained in its headnotes, courts may not impose a compulsory administration on a real estate property or business of the debtor if there are compelling reasons for not doing so. Compelling reasons are those that render the administration unprofitable, when the business's operation and success are closely related to the personal reputation and contribution of its managers or partners, or when the business's operation falls within the provisions regarding the protection of trade secrets.

ii Insurance companies

On 5 February 2016, the Greek legislator abolished all provisions16 that applied to insurance companies, by virtue of Law 4364/201617 (the Law). The Law is in compliance with Directive 2009/138/EC, regarding the undertaking and operation of insurance and reinsurance companies.

According to the Law, such companies are required, as an integrated part of their business strategy, to maintain tools to proceed with a regular practice of assessing their overall solvency needs. The results of each assessment should be reported to the supervisory authority, which is the Bank of Greece.

The new provisions aim to create a trustworthy environment and minimise unexpected liquidations of insurance companies that have severe financial and social results. In this respect, Article 235 of the Law provides that insurance companies are not subject to the rules of bankruptcy or pre-bankruptcy proceedings. As such, the Bank of Greece is the only competent authority to decide on the revocation of its licence as well as on the restructuring measures for an insurance company, including the rise of capital, mandatory transfer of portfolio, suspension of payments to third parties etc., as well as on the winding-up proceedings following the suspension of their licence.

In the case of winding up, the priority of claims is as follows: (1) employees' claims arising from employment contracts and employment relationships, (2) claims of the state arising from due taxes, (3) pension fund claims and (4) claims on assets subject to rights in rem.

iii Credit institutions

According to the new rules on credit institutions, Article 145, Paragraph 1(a) of Law 4261/2014 provides that, subject to the specific provisions of Law 3458/2006 on Restructuring and Liquidation of Credit Institutions, such undertakings are not subject to the rules of bankruptcy or pre-bankruptcy proceedings.

To this extent, Law 3458/2006 provides for a special liquidation procedure that may be voluntary or involuntary. In any case, if the Bank of Greece suspends the licence of a credit institution, then such an undertaking is immediately placed under involuntary liquidation.

iv Investment services companies

There are a number of laws applying to investment companies, depending on their nature and the investment services provided. Thus, Law 4514/201818 applies to investment services firms and investment intermediation firms, Law 3371/2005 applies to portfolio investment companies, Law 2367/1995 applies to closed-ended investment companies, Law 2778/1999 applies to real estate investment companies and real estate mutual funds, Law 2992/2002 applies to venture capital funds, Law 2367/1995 applies to venture capital companies, Law 4099/2012 applies to undertakings for collective investment in transferable securities and their managers, and Law 4209/2013 applies to alternative investment funds and their managers.

In general, investment companies can be declared bankrupt, subject to explicit provisions of the law that require a specific liquidation procedure supervised by the competent authority.

In this respect, Article 90 of Law 4514/2018 provides that a bankruptcy proceeding may be suspended if the Hellenic Capital Markets Committee revokes the licence of the company concerned (for reasons provided in Article 8 of Law 4514/2018), when a special liquidation procedure is commenced.

It should be noted that Article 2, Paragraph 3 of Law 3458/2006 on Restructuring and Liquidation of Credit Institutions, as amended by Law 4335/2015,19 also applies to investment companies that are established as parent companies in Greece and that have subsidiaries in another Member State. It remains to be clarified whether this new amendment, which provides for a restructuring procedure rather than bankruptcy and liquidation, will be applied to investment companies established as parent companies in Greece that do not have any subsidiaries in the EU area.

v Individuals

As is mentioned above, the new Bankruptcy Law stipulates that non-merchant individuals are eligible for bankruptcy as well.

In accordance with the previous legislation, non-merchant individuals were protected under Law 3869/2010. Nevertheless, pursuant to Article 265/1b of the new Bankruptcy Law, from the entry into force of the latter, the possibility of submitting new petitions in accordance with the provisions of Law 3869/2010 ceases. The new Bankruptcy Law introduces a mechanism for protecting the primary residence of vulnerable distressed debtors. The concept of 'vulnerable debtor' is determined on the basis of objective criteria, whereas the above-mentioned mechanism provides for the sale and lease back of the primary residence.

Specifically, in cases in which a vulnerable debtor is declared insolvent, the latter may submit a request for the transfer or lease of their primary residence to a private entity that acquires and re-leases such residences. This entity acquires the ownership right over the vulnerable debtor's property at market value pursuant to the assessment of a certified valuator. The ownership is free of any encumbrances or claims of third parties. This property shall be leased back to the debtor for 12 years. In the event that the debtor fulfils their rental obligations, they are able to exercise the right of repurchase and acquire the property at a price determined in accordance with the provisions of the Law. It should be noted that the public procurement procedure with which the competent entity will be appointed has not started yet. A relevant ministerial decision is expected to be issued by the end of the year.

vi Informal methods to restructure companies in financial difficulties

Informal methods applied to restructure companies in Greece usually include the following:

  1. an amendment of debt repayment schedule, which is the plainest type of financial restructuring, aimed at making existing debt repayments consistent with the debtor business's projected cash flows. Such an amendment may also be accompanied by an enhancement of lenders' security and may also include some additional financing to cover urgent needs of the debtor;
  2. standstill agreements, under which debt repayments to banks and bondholders are suspended over a specified period for the purpose of negotiating and reaching a compromise agreement on the financial and operational restructuring of the debtor. Usually, standstill agreements provide the enhancement of participating lenders' security and may also include some additional financing to cover urgent needs of the debtor, as well as some changes in the debtor's management;
  3. restructuring agreements regarding the financial restructuring of the debtor, combined with operational restructuring of the debtor, on the basis of a business plan and a management team approved by the participating lenders. Such agreements include various components, such as (partial) debt-to-equity conversion, the refinancing of the debt that is agreed as sustainable (by the debtor's business and on the basis of the approved business plan), the taking of a new enhanced participating lenders' security package and new working capital financing, for supporting or restarting the debtor's operation and growth. According to the debtor's financial position and type of business, restructuring may include negotiations with the employees and suppliers and agreement on certain payment arrangements in respect of outstanding amounts, to enable the debtor's stable operation; and
  4. the above transactions would ideally take place with the participation of existing major shareholders, in the form of new equity contributions (a component that has been quite limited in Greece up until now) or of an investor capable of enhancing further debtors' management efficiency, capital structure, and credibility in the Greek and international market.

vii Other laws relevant to insolvency and restructuring

The taking and enforcement of security

The new amendments to the Bankruptcy Law categorise Greece as an even more 'creditor-friendly' jurisdiction than before. The right of creditors to submit a pre-pack deal for ratification, without the debtor's consent, in the case of present cessation of payments, the limitation of the available deadlines, as well as the right of the special mandator to substitute shareholders or stakeholders that deny their presence or vote for decisions that are required under the pre-pack deal are major provisions that enhance the efficiency of the restructuring process and disregard any act that could jeopardise the operation of the entity in a way that promotes both creditors' and society's interests.

Moreover, financial assistance to companies is provided mainly by the banks, which enjoy multiple types of security measures and privileged enforcement in cases of insolvency. A bank providing a loan will take a mortgage on the company's immovable property or a fixed or floating charge on its movable property, particularly on its inventory and equipment. Claims arising from financing of the entity in connection to a restructuring plan are now the top priority and must be satisfied in full. Thus, banks that in most cases provide such financing are fully protected and satisfied under the new Bankruptcy Law.

In fact, following the announcement of the creditors' claims, within three months20 of the publication of the court's decision and their verification by the judge rapporteur and the insolvency practitioner, the latter commences with the realisation of the company's assets (unsecured and secured). The distribution of the proceeds to the creditors takes place in accordance with the general provisions of the Code of Civil Procedure, unless otherwise provided for by the new Bankruptcy Law. First in priority are creditors with general preferred privileges.21 The holder of the security in a specific asset of the company, whether immovable or movable, has a specific privilege (second class) and may be satisfied after the general preferred privileges. The third (last) class of priority includes unsecured creditors, who are satisfied after general and specific privileges. Nonetheless, before payments to any of the aforementioned classes, bankruptcy expenses, expenses concerning the management of 'non-exempt' property22 and claims of collective creditors23 must be paid in full. Moreover, if the three priority classes coincide, the proceeds are separated as follows: after the general preferred creditors who have granted financing, goods or services in connection with the restructuring agreement receive full payment, then the rest of the general creditors receive 25 per cent of the proceeds, special preferred creditors receive 65 per cent and unsecured creditors receive 10 per cent.

Duties of directors of companies in financial difficulties

In Greece, the law sets out two different categories of the directors' duties: the first category concerns the payment of the entity's tax liabilities and social security contributions, while the second category concerns the initiation of the bankruptcy proceedings.

With regard to the first category, in case the entity fails to withhold, collect or pay income tax, VAT, unified property tax or its respective share of social security contributions and any surcharges, the directors, administrators, executive managers and the insolvency practitioner (syndic or insolvency administrator) of a legal entity are rendered jointly and severally liable for payment of such taxes and contributions under the following cumulative conditions:

  1. the above individuals must bear the above capacities either during the operation of the legal entity or at the time of dissolution, merger or at the time of winding up of the entity;
  2. the monetary obligations of the company became due during their term of office under the above-mentioned capacities; and
  3. the monetary obligations have not been paid to the state owing to the liability of the above persons.24

This joint and several liability arises at the date of liquidation or merger or acquisition of the liable company.

The second category of duties refers to the prompt and timely initiation of the bankruptcy proceedings by the company's directors. The Bankruptcy Law envisages the joint liability of directors25 as well as of those who exercised undue influence on them, if they fail to promptly file a bankruptcy petition, within 30 days from the date that there is present inability of the company to pay its liabilities as they become due. Such liability entails the restitution of creditors for damages arising from the reduction of the insolvency proceeds.

Similarly, joint liability is attached to the company's directors if the cessation of payments is a result of a fraudulent or grossly negligent act.26

It is worth mentioning that Articles 197 and 202 of the Bankruptcy Law establish criminal liability against the company's directors, in cases that the latter defraud creditors, conceal or fraudulently transfer assets of the company, dispose of inventory at very low prices, make false declarations or diminish the value of the company's assets.

Clawback actions

Fraudulent exploitation of the debtor's assets is also avoided through the annulment of specific transactions that took place in the statutorily determined suspect period. The suspect period includes transactions carried out within the time period from the cessation of payments until the declaration of bankruptcy.

The Bankruptcy Law distinguishes between transactions that must be annulled and transactions that could be annulled.

The insolvency practitioner must proceed with the mandatory annulment of transactions27 made by the debtor within the period of filing the bankruptcy petition and the declaration of bankruptcy (suspect period) and specifically:

  1. donations and gratuitous deeds or deeds that resulted in undervalued consideration for the entity;
  2. payment of debts that were not due and payable;
  3. payment of due debts with means other than cash or the agreed consideration; and
  4. imposition of security measures on the entity's assets for pre-existing debts, when the entity had not undertaken such an obligation or for new debts arising from a novation agreement.

On the contrary, the insolvency practitioner may proceed28 with the annulment of transactions when the other party acted in bad faith or knew or could have known of the company's cessation of payments and that such a transaction was detrimental to the creditors' interests.

Similarly, if the company entered into transactions with the intent to defraud creditors or benefit other creditors within five years prior to the declaration of bankruptcy, these transactions may be annulled, provided that the other party knew of the company's intent.29

Transactions that took place during the execution of an extrajudicial settlement agreement or a restructuring agreement are explicitly exempted from such revocation.30 It should be noted that there are some transactions that are exempted from bankruptcy revocation, even if entered into within the suspect period, specifically:

  1. regular business activities and arm's-length transactions;
  2. the provision of services or goods by the company for which counter-consideration was an immediate and equivalent payment in cash;
  3. the debtor's transactions explicitly excluded by law from the application of the provisions on revocation, invalidity or cancellation of transactions, which took place in the last two years prior to the declaration of the bankruptcy;
  4. transactions that were reasonable and urgently required for the negotiation of a restructuring agreement;
  5. the granting of a mortgage in favour of a company – especially a bank – according to Legislative Decree 17.07/13.08.1923;
  6. the granting of a pledge in favour of banks, regarding pre-existing claims from loans or open accounts, according to Legislative Decree 4001/1959;
  7. the creation of a mortgage or pledge to secure the issuance of bond loans or transfer of claims, according to Law 4548/2018; and
  8. the granting of security by special purpose vehicles (SPVs) or other third parties in favour of banks, or other third parties to secure claims against the SPV, acting within the scope of a public–private partnership agreement, according to Law 3389/2005.

Recent legal developments

The new Bankruptcy Law regulates all the issues of bankruptcy. Greece has incorporated the provisions of Directive 1023/2019 into the national legal framework as well. All individual debt settlement tools that existed under the previous legislative regime for the settlement of private debt are integrated into the new Bankruptcy Law. The new legislation fundamentally reforms the framework for dealing with financial weakness, collective satisfaction of creditors' claims and discharge of debt of any person.

The continuous changes to the Bankruptcy Law prove that national legislators are vigilant about the current needs of the market, the necessity to interfere efficiently in the operation of distressed businesses and the improvement of the corporate rescue framework. Both the recent and upcoming amendments demonstrate a greater coherence and an increased efficiency in these rules that offer more opportunities and reduce costs and time loss.

i Regulation of the insolvency practitioner profession

The Bankruptcy Law provides for the role of the insolvency practitioner. The insolvency practitioner is responsible for undertaking the duties of the syndic or insolvency administrator as these duties are set out in the Bankruptcy Law and is supervised in this context by the judge rapporteur. The profession of the insolvency practitioner is regulated by virtue of Presidential Decree 133/2016, according to which a natural person can be appointed as an insolvency practitioner if they have succeeded in the relevant national exams and have obtained the required licence.

The Greek Bankruptcy Law stipulates that law, auditing and consulting firms may be appointed as insolvency practitioners as well, provided that these firms employ at least one certified person with any employment relationship.

To participate in these exams, the natural person must have exercised a legal or audit or accountant class A profession for at least five years. In exercising the duties assigned to them, the insolvency practitioner is liable to bankruptcy creditors and the debtor for any fault, unless otherwise provided in law. The latter shall demonstrate the diligence of a prudent insolvency practitioner. They are personally liable to third parties who have been harmed by their actions only for intentional fault. Liability under the provisions of the tort law is not excluded. Any claim against the insolvency practitioner is prescribed three years after the injured party became aware of the damage and the event giving rise to the damage occurred. In any case, claims against the insolvency practitioner are time barred for three years after the termination of their duties.

Moreover, the insolvency practitioner is supervised by the Insolvency Administration Committee, which is also responsible for keeping a register of accredited insolvency practitioners, while the Disciplinary Board shall be responsible for monitoring the insolvency practitioner's appropriate conduct and to impose the statutory disciplinary measures in cases of misconduct.

ii Procedural changes in restructuring

The new Bankruptcy Law has simplified the restructuring procedure and introduced shorter and more internal proceedings, as is explained above (see Section II.i).

iii General changes in insolvency procedure

Provisions regarding the debtor's duties

The new Bankruptcy Law provides for two basic amendments regarding the debtor's duties: (1) concerning the duty of the debtor to submit along with the bankruptcy petition their financial data and a certificate witnessing the amounts of their debts, issued by the state, which will help the court to have a more accurate picture of the debtor's financial situation; and (2) concerning the appointment of the debtor as a manager of the entity's assets (along with the insolvency practitioner), regardless of whether or not they filed for a bankruptcy petition. In fact, the only criterion is whether such an appointment is in the creditors' interests.

Extension of liability

The new Bankruptcy Law provides for extended liability for both the insolvency practitioner and the board of directors or other management body of the entity. On one hand, the insolvency practitioner is liable31 for any default in the performance of their duties, while liability towards third parties may be attached only in cases of intentional fraud. Liability under tort law is not excluded.

On the other hand, the board of directors or other management body of the debtor are liable jointly and severally if they fail to promptly file a bankruptcy petition within 30 days of the date that the entity is unable to pay its liabilities as they become due. 32 Such liability entails the restitution of creditors for damages arising from the reduction of the insolvency proceeds. If the delay in submitting the bankruptcy petition is due to an attempt to avoid insolvency through negotiations to reach a restructuring agreement or an agreement in the frame of the extrajudicial debt settlement mechanism, such liability does not exist.

Similarly, joint liability is attached to the entity's directors or management if the cessation of payments is a result of a fraudulent or grossly negligent act.

Shortening of deadlines

In general, the deadlines33 of the insolvency procedure are shortened as follows: (1) the deadline for filing an appeal against the orders of the judge rapporteur is now 10 days from the issuance of such orders; (2) the deadline for the convention of the creditors' assembly by the judge rapporteur is now five days prior to such a meeting and the summary of the rapporteur's order for convening the assembly must be published in the Bulletin of Judicial Publications of the Jurists' Pension Fund.

Priority of claims

Priority of claims is regulated in Articles 96 and 167 of the Bankruptcy Law as well as in Articles 975 to 978 of the Code of Civil Procedure mutatis mutandis. Following the enactment of the law, there are entirely new claims that will be secured with assets that do not bear any encumbrances up to that date (of the enactment) then employment claims existing prior to the date of the first auction and concerning due salaries up to six months shall have super-priority for an amount up to the minimum wage provided for an employee above 25 years old multiplied by 275 per cent. This super-priority is calculated per employee and per month for the aforementioned six-month period, following the payment of legal costs, costs for the management of the bankruptcy property and other claims arising from the bankruptcy's works.

After the satisfaction of this super-priority, the priority of claims is as follows: (1) financial facilities provided throughout the restructuring period, (2) special preferred claims, (3) general preferred claims and (4) unsecured creditors.

Creditors' bankruptcy liquidation claims are classified into the following categories:

  1. costs pre-deducted from the liquidation proceeds before the satisfaction of any other class of creditors, including:
    • judicial fees relating to the administration of the bankruptcy property;
    • claims of the group creditors (arising in the course of bankruptcy and as a result thereof);
    • claims that are equipped with a special privilege or lien over the proceeds in respect of certain movable or immovable property or over money including claims:
    • for expenses with a view to maintaining the particular asset;
    • secured with an in rem security (pledge); and
    • for expenses incurred for the production and harvesting of crops; and
  2. claims that are equipped with a general privilege or lien, including claims:
    • for new money injected or goods or services provided to ensure the continuation of the company's activities and payments under a restructuring agreement;
    • from dependent employees and lawyers;
    • from the state for value added tax and withholding taxes imposed with surcharges of any nature;
    • from social security organisations;
    • from the state and local government bodies for all causes; and
    • unsecured claims and claims of secured creditors whose security does not suffice for the full satisfaction of their claims.

According to Article 167 of the Bankruptcy Law, the claims of category (a) above shall be satisfied first and in full.

If more classes of creditors concur, after payment of pre-deducted claims (and if new money claims concur with unsecured claims following full repayment of the first category), creditors are satisfied as follows:

Concurrent creditorsPercentages of liquidation proceeds for the satisfaction of claims
Secured
General lien
Unsecured
65%
25%
10%
Secured
Unsecured
90%
10%
General lien
Unsecured
70%
30%

According to this new ranking system, the above classes of creditors are satisfied in the following order:

  1. pre-deducted costs and claims;
  2. claims of employees for salaries of up to 6 months up to a certain amount, which may be calculated on the basis of the law;
  3. claims for new money;
  4. secured claims;
  5. generally privileged claims and remaining secured claims; and
  6. unsecured claims.

Ranking cannot be amended, as it is deemed as jus cogens.

The Bankruptcy Law provisions on creditors' rankings are considered mandatory (ius cogens) and may not be amended through relevant contractual arrangements. Certain provisions of law refer to 'creditors ranking last' (subordinated creditors) (i.e., even after unsecured creditors). However, contractual arrangements altering the core provisions on ranking may not be followed in cases of bankruptcy to the extent that they contravene mandatory law provisions.

Liquidation of small entities

The new Bankruptcy Law provides for important amendments to the liquidation of small companies. The law identifies small entities as those that meet at least two of the following criteria: (1) have total assets amounting up to €350,000; (2) have a turnover amounting up to €700,000; and (3) employ up to 10 people on average. Nevertheless, if a legal entity has a turnover up to €2 million, it is not considered a small company in the terms of the law, even if the other two criteria are fulfilled. In cases of individuals, the asset criterion applies to the property of each individual ('small-scale bankruptcies').

The application for the declaration of small-scale bankruptcies is submitted electronically to the Electronic Solvency Register. Thirty days after the publication of the application in the Registry and unless an intervention against the application is submitted, the application is accepted by the Bankruptcy Court. The rapporteur and liquidator are appointed as well. Announcement of the creditors' claims must take place within three months of publication of the court's decision.

Sales of assets that are subject to deterioration, or undervaluation, or if their preservation is costly can proceed by the insolvency practitioner without the consent of the judge rapporteur. The sale of the debtor's assets takes place in accordance with the provisions for the sale of the debtor's individual assets.

If the first auction and its two repetitions within 20 days are fruitless, then the judge rapporteur may order the sale of the immovable property without an auction, following such a request by the insolvency practitioner. The order of the rapporteur must be issued within 30 days of the submission of the relevant request by the insolvency practitioner and is not subject to appeal.

If the bankruptcy has not been completed within one year of the declaration, the insolvency practitioner has to submit a report to the rapporteur explaining the reasons for the delay of the procedure. If the delay is deemed unjustified by the rapporteur, the latter replaces the insolvency practitioner.

Discharge of debts

If the debtor is a natural person, they are completely discharged from their debts to the bankruptcy creditors, regardless of whether or not they have been announced, 36 months from the date of the declaration of the bankruptcy. If the bankruptcy estate includes the debtor's primary residence or other fixed assets whose value exceeds 10 per cent of their total liabilities, then the discharge comes into effect one year after the declaration of the bankruptcy. According to this mechanism, the debts do not pass to the debtor's heirs.

Anyone who has a legal interest can appeal against such a discharge before the Bankruptcy Court. Admissible grounds of appeal are fraudulent actions on the part of the debtor, the debtor did not act in good faith and did not cooperate with the organs of the bankruptcy either at the time of the bankruptcy's declaration or during the relevant proceedings, the debtor concealed income or assets during the insolvency proceedings, and the debtor has been prosecuted or convicted for specific crimes. The Bankruptcy Court decides on the discharge after reviewing the report of the rapporteur and hearing the insolvency practitioner.

The debtor is not discharged from debts incurred after the filing of the bankruptcy petition, debts that are result of deceit or gross negligence and caused death or body injuries to a person, and maintenance debts.

Such a discharge provides for individuals who were jointly and severally liable for claims pertaining to the insolvency due to their capacity as representatives or administrators of a legal person or entity as well.

The debtor's discharge does not terminate the insolvency proceedings and especially the liquidation of the debtor's assets and the distribution of the proceeds.

iv Regulation of NPLs and the Hercules Asset Protection Scheme

As a result of the covid-19 pandemic, the economy came to a sudden halt. Persistently high NPL ratios were a concern in several European countries after the 2008 to 2012 financial crisis, and the covid-19 pandemic might cause a re-emergence of the NPL problem. Significant achievements in the legal, judicial and overall NPL management framework have been introduced in Greece within the last two and a half years, which can be highlighted in the following areas: an out-of-court workout framework has been enacted, amendments in the Greek Bankruptcy Law satisfactorily address the previously identified impediments, changes in the Code of Civil Procedure appear to have set the basis for much improved efficiency in the enforcement of security rights (including electronic auctions), the issue of the liability of banks' restructuring personnel has been addressed, the profession of the insolvency administrator has been regulated, the issue regarding tax losses arising from sales of receivables has been resolved, and, last but not least, the newly proposed asset protection scheme that the EU has approved (the Hercules Asset Protection Scheme (HAPS)). The latter intends to help banks offload up to €30 billion in NPLs. The Greek government launched such a securitisation scheme to deal with the country's NPL issue. The Hellenic state will guarantee the senior tranches of the securitisation deals as long as more than half of the non-guaranteed mezzanine and junior tranches have been sold to private investors. HAPS was originally envisaged to provide €9 billion but has been upped to €12 billion. As a securitisation scheme it is based on the successful Italian Non-Performing Loan Securitisation Guarantee scheme and its main aim is to enable banks to transfer their NPL exposures to an SPV, which will subsequently securitise them. Piraeus Bank has finalised an agreement with Intrum to create a new Athens-based distress fund to manage NPL portfolios and manage real estate. Eurobank acted similarly with €7.4 billion of loans via its Project Cairo securitisation to doValue, a Fortress subsidiary, while Alpha Bank closed a deal to transfer €12 billion gross book value of loans under its Project Galaxy scheme.

Therefore, investors' interest in any type of Greek NPE loan books is impressive and demonstrates the willingness of international large pots of capital to tap into a highly underpenetrated NPE market with significant potential, such as the Greek one. It is evident that resolution of the NPEs is the last sizeable and challenging obstacle the Greek banking system will have to overcome. A few NPE transactions happened in 2018 and 2019, and the effort to further intensify in 2020 is more than evident. The data from the Bank of Greece show that the exposure of Greek banks to NPLs amounts to €81.8 billion, while efforts were being made to reduce them up to €38.6 billion (a drop of 47 per cent) by the end of 2019. Of those NPLs, a portfolio amounting to €16.4 billion is expected to be disposed of or to fall under the special administration procedure.34 In fact, the pressure for liquidity led to replacements of the banks' boards of directors to ensure that a highly qualified management can face the current challenges of the banking sector. The law on NPLs was recently modified in view of making the respective legal framework more attractive and easier for the management and acquisition of Greek NPLs. 35

NPLs will be managed either by special NPL asset management companies limited by shares (with special and limited scope of business) that operate in Greece or in the European Economic Area or purchased and transferred to companies limited by shares that operate in Greece or in the European Economic Area or in countries outside the EU36 and part of their business scope is to purchase and acquire claims from loans or credit agreements.

The regulation of NPLs sets out the requirements for the establishment and operation of the eligible companies. For a special NPL asset management company to acquire permission to manage NPLs (and any collateral immovable property), it must file with the Bank of Greece, among other things, its article of association; the identity of any and all natural or legal persons that have directly or indirectly a special participation in the company; the identity of any and all natural or legal persons that exercise control in the company; a business plan including the company's projected actions, strategy and available resources; a detailed report of the methods and procedures to be adopted for such management; and questionnaires that assess its ability and suitability to deal with the restructuring of NPLs. The Bank of Greece shall grant the required licence within two months of the submission of the respective petition. Furthermore, a management company must have a minimum share capital of €100,000, and if it wishes to finance new loans or credit agreements, a share capital of €4.5 million.

The acquisition of NPLs, on the other hand, does not require a specific licence but the acquiring company must have signed a management agreement with a special NPL asset management company. The sale and transfer of such loans shall be effective only on delivery of a written extrajudicial invitation to the debtor (and guarantor) to settle their debt within 12 months prior to such a sale and transfer, according to a debt settlement agreement in writing. The acquisition is effective against third parties following registration of the agreement in the books of the Registry of Pledges and notification of the assignment to the debtors and any guarantors.

It should be noted that the sale and transfer of NPLs shall have an income taxation on the goodwill borne by the acquiring company, and both management and acquisition agreements shall be subject to a VAT taxation of 24 per cent. Stamp duties are explicitly excluded for the agreements executed by the special NPL asset management company.

Finally, Law 4472/2017 introduces a major provision according to which those persons who are responsible for supervising and or managing (1) public property (including all kinds of state property or property of state-owned entities) or (2) property of a credit or financial institution are immune from any criminal or civil liability arising from their actions or failure in connection to the restructuring or discharge of loans, claims or charges, within the scope of the Bankruptcy Law, the law on the extrajudicial debt settlement procedure, the law on financially distressed individuals and households, the law on special liquidation of credit institutions or the law on NPLs, and in accordance with the provisions of their internal regulations and guidelines, rules and procedures, and applicable laws. These actions or failures to act must also aim to settle or restructure debts or assist the operation of the business and should not deteriorate the financial situation of the entity in comparison with that which would result from a liquidation procedure.

v Restructuring of municipalities and communities

According to Article 76/2 of the Greek Bankruptcy Law, legal persons governed by public law like municipalities and communities (M&Cs) are not eligible for bankruptcy. Law 4555/2018 and 4111/2013 are applicable thereon.

The Financial Independency Observatory of Municipalities and Communities (the Observatory) is entitled to report to the Ministry of Internal Affairs as well as the M&Cs the latter's deviation of more than 10 per cent from the quarterly budgetary targets and provide it with guidelines and methods to overcome such deviation. If the Observatory concludes that an M&C is incapable of drafting a preliminary balanced budget, fraudulently records false or overestimated financial data, or does not record the compulsory expenditures, it is also entitled to request further evaluation of the financial data and the drafting of a report describing the financial situation of the M&C. In a second step, the Observatory is supposed to cooperate with the Ministry of Internal Affairs concerning the matter of balancing the budget. For the financing of the M&Cs, a programme agreement is concluded between the Ministry of Internal Affairs and the M&C concerned. The financing is covered by the account for providing financial support to the M&Cs, which is held with the Deposits and Loans Fund. The drafting of this agreement takes place only in the event that the M&C concerned did not manage to secure funding from credit or financial institutions duly established and operating either in Greece or abroad. The Observatory is the competent body for monitoring the implementation of this agreement. The latter defines the monitoring process as well as the specific duties of the Observatory.

Significant transactions, key developments and most active industries

i Value and significance of the transactions

The value of distressed deals is difficult to assess, as the legal process typically involves the partial sale of the balance sheet for the assumption of liabilities.

Intralot

Intralot is a Greek company that supplies integrated gambling, transaction processing systems, game content, sports betting management and interactive gambling service to state-licensed gaming organisations worldwide. The company acts as both a lottery vendor and a lottery operator. It has a presence in 53 countries and a workforce of approximately 5,400 people. It is a publicly listed company on the Athens Stock Exchange. Intralot concluded in August 2021 an agreement with its bondholders for restructuring of its loans, with indirect haircut and extension of repayment of liabilities, which includes exchange of bonds with new ones and with shares of a subsidiary.

The new capital structure significantly improves the company's position and its ability to take advantage of new opportunities in developed markets based on its strategic planning. The agreement included the following terms.

For US$247.5 million worth of bonds maturing in September 2021, Intralot gave its bondholders its US subsidiary Intralot Inc. US$242.1 million worth of bonds maturing in September 2025. The exchange corresponds to a haircut of 18 per cent.

It exchanged its own bonds with a nominal value of US$118.4 million maturing in 2024, giving bondholders 34.27 per cent of the shares of Intralot US Securities, through which it controls the American subsidiary of Intralot Inc.

Intralot holds 65.73 per cent of Intralot Inc and the management of the company. With these moves, Intralot reduced its debt by US$163.8 million and postponed the repayment of its liabilities of US$241.1 million by four years.

Marfin Investment Group

Marfin Investment Group (MIG) is a Greek investment company that acquired several companies in the past and is currently controlled by Piraeus Bank. Its shares are currently listed on the Athens Stock Exchange. In May 2021, it concluded the restructuring of all its bank lending with Piraeus Bank.

The repayment period of the entire loan was extended by three years with the right of further extension by one year at the discretion of the lending bank, without interim repayments. The total borrowing became long term, as a consequence of the restructuring, as the capital is expected to be repaid at the end of the loan period.

The nominal interest rate will average 1.5 per cent per annum compared with 4.62 per cent in 2020, which corresponds to an annual amount of €6.8 million (with the possibility of capitalising most of it), reducing cost to the company of approximately €17 million annually. The following terms were agreed to in the restructuring agreement:

  1. issuance of a new common bond loan with an initial issue amount of €281 million; and
  2. modification of the terms of the existing convertible bond loan of a balance of €160 million.

To secure the receivables of the lender bank from the above bond loans, a pledge of an A and a B class was granted, respectively, on all the shares of MIG's subsidiary Attica SA Holdings that are held (directly and indirectly) by MIG.

The agreement significantly improved the financial structure of the company as well as the future cash flows relating to the servicing of its debt.

Attica Group

Attica Group is an international ferry boat operator, whose shareholders are MIG, representing 79.38 per cent of the share capital and Piraeus Bank representing 11.84 per cent of the share capital. MIG is willing to sell the ferry operator's shares through the sale of share packages to investors attempting to restructure and reduce loan obligations. It is estimated that the Attica Group's liabilities amount to €356 million. Replying to a letter issued by the Hellenic Capital Market Commission, MIG pointed out that it has received several offers from investors that have already been rejected and there is no binding offer from an investor at this moment, except for the above-mentioned Attica Group, which is ready to issue a corporate bond worth €150 million to raise its share capital and finance the group's loan restructuring. It is worth mentioning that Attica Group has previously issued a corporate bond that was covered entirely by the Fortress fund. In this case, the capital raised financed the restructuring of Attica Group's subsidiary Blue Star Ferries' debt.

Kalogirou

In 2018, Kalogirou, a branch of Lemonis Clothing & Footwear Group of Companies, was placed in restructuring, following a petition filed by FAIS Group. According to the relevant decision issued by the court, the new partnership, under the restructuring plan, consisted of FAIS Group, whereas Attica Group and the Lemonis family were the minority shareholders. The restructuring plan's goal was for the Lemonis Group to have positive earnings before interest, taxes, depreciation and amortisation (EBITDA) from 2018. The Group's turnover is expected to reach the amount of €54,963 million in 2023. Over the same timescale, the Group's EBITDA are expected to be positive (specifically €6.289 million in 2023), when in 2016 and 2017 they were negative, coming up to minus €4,341 million and minus €5,164 million, respectively. The Group's liabilities, according to the restructuring plan, are expected to be reduced to €6.430 million in 2019 and €2.345 million in 2020, when in 2017 they came up to €70.456 million. In the long term (specifically in 2023), the Group is expected to achieve a profitability of up to €9.392 million.

Notos Com Holdings

Notos operates a number of department stores representing international brands, under the Notos Galleries and Notos Home brands in Greece. It was established in 2001 through a combination of several companies. According to its financial data, Notos Com Holdings had a total of liabilities amounting to €230 million, including total borrowings of €152 million. Due to its financial distress, Notos Com Holdings opted for the restructuring procedure in 2018, which was supported by Pillarstone, an NPL platform backed by KKR making its first investment in Greece. The deal was the first of its kind in Greece after the government reformed laws to better protect international investors and was made after months of negotiations with the four systemic banks of Greece, namely Alpha Bank, Eurobank-Ergasias, the National Bank of Greece and Piraeus Bank. The banks and Pillarstone invested €25 million in new funds, while the firm's majority owner, Michalis Papaellinas, also invested in the structure. The restructuring plan included, inter alia, provisions for the reduction of the number of the employees and the partial transfer of the Notos Home activities to the store at Stadiou & Eolou Street, while one of the firm's central stores sited in Kotzia Square in Athens was closed after operating for 15 years.

Marinopoulos Super Markets

In 2016, one of the largest supermarket chains in Greece was placed in a restructuring procedure due to its financial distress. This case received great press coverage, since it was the first case of the specific industry and with financial and social interests of various stakeholders. The pre-pack deal provided for the establishment of a new company (NewCo), under the trade name Hellenic SuperMarkets Sklavenitis SA, in which Marinopoulos was to transfer assets amounting to approximately €715 million, liabilities amounting to approximately €1 billion, all its commercial claims and all its fixed assets. Sklavenitis SuperMarkets SA (another major player in the industry) will acquire the NewCo and contribute in cash, through a share capital increase, an amount of approximately €125 million.

According to the pre-pack deal, which was ratified by the court, the restructuring plan envisages four basic components: (1) haircut of some claims, (2) extensions of credit lines by the banks, (3) increase of the number of total instalments for claims towards the state and the social security institution, and (4) specific provisions for employees. In particular, claims of both secured creditors and unsecured creditor suppliers of Marinopoulos (the latter's claims amounting to approximately €647 million) will be reduced by up to 50 per cent. Apart from Alpha Bank, which accepted a haircut of up to 20 per cent, banks (Alpha Bank, Eurobank, Piraeus Leasing, National Bank of Greece and National Leasing) shall receive full payment of their claims, amounting to approximately €196 million, within 20 years, after a five-year grace period and in 15 unequal instalments with interest, following a capitalisation of any due interest amounts, which will take place at the execution date of the pre-pack deal. Claims of the state and the social security institution will be paid in full and in 250 equal and interest-free instalments.

The banks agreed to extend the credit line of Marinopoulos with an amount up to approximately €55 million and provide a credit line to NewCo up to approximately €352 million. Apart from the share capital increase in the NewCo, Sklavenitis SuperMarkets SA and Marinopoulos Bros. Holdings SA will also provide interim financing of up to approximately €15 million and €10 million. It is noted that all existing employment, leasing and tenancy agreements will be transferred to the new company. Moreover, any and all administrative licences, trademarks, permissions of use, inventory, equipment and furniture are transferred to the new company.

Dias Aquaculture SA and Selonda

The restructuring of Dias Aquaculture (Dias) was one of the first that occurred in the fish farm industry. Dias applied for a pre-pack deal, which included a transfer of Dias's business to Selonda Aquaculture SA. In particular, Dias contributed in kind its total assets, amounting to €69 million, and part of its liabilities, amounting to €29.6 million, to Selonda's share capital. A part of Dias's liabilities, which constituted 81.95 per cent of its total liabilities, was not contributed to Selonda; instead, it remained within Dias's financial statements and was covered with the acquisition of 41,261,980 shares issued by Selonda, in accordance with its share capital increase of €12.4 million. The newly issued shares were subsequently transferred by Dias to its creditors, on a pro rata basis, for their satisfaction. It should be noted that Selonda itself had also applied for a restructuring plan, which resulted in a haircut of its debts held by the banks, amounting to €50 million. Selonda is now managed and operated by a new management appointed by the participating banks, which is seeking an interested investor to buy out Selonda.

Folli Follie

The company has submitted for ratification to the Multi-Member Court of First Instance of Athens the restructuring agreement with its creditors to settle the company's huge debts towards such creditors, avoid the declaration of bankruptcy and ensure its development sustainability. For the first time since the implementation of the new Bankruptcy Law, the court's decision ratifies under certain conditions a restructuring agreement, while at the same time it provides for a haircut of 68 per cent of the company's total debts. Furthermore, the court's decision states that the restructuring agreement and the business plan are realistic and feasible, the financial loss of the creditors would be greater in the event of the bankruptcy's declaration, and the restructuring agreement neither is a result of unlawful behaviour nor violates any jus cogens rules.

ii Restructuring techniques used

As normal methods of restructuring are not enough to save distressed companies in the Greek crisis environment, debtors and their creditors are led to more complicated solutions, depending on the nature and size of their business. In particular, large companies that were listed on the Athens Stock Exchange preferred to go private, through acquisition by an interested investor. A greater percentage of medium-sized companies resorted to techniques such as debt-to-equity conversion and debt forgiveness agreements. In such cases, the banks, which usually hold the largest percentage of their debts, take over their management, proceed with drastic restructuring measures and then search for an interested buyer. Restructured companies – especially those with increased exports – are able to obtain new working capital financing. More advanced tools, such as a debt push-up, or even the creation of new group structures with lower debt levels or the consolidation of existing players in each sector, are also used to rescue viable businesses and recover part of the existing debt.

iii Distressed industries and market trends

The industries of construction, textiles, electric appliance stores and supermarkets have suffered the most severe financial losses within the Greek market. Such distress can be explained by the fact that they are all capital-intensive industries, with high running costs and squeezed profit margins and, in addition, they are over-leveraged (through abundant financing provided to them before the crisis). Profit margins have decreased even more now that companies have limited access to working capital finance. Moreover, the recent changes in the income tax code, the real estate property taxation and the increase of VAT up to 24 per cent have significantly diminished the spending capacity of Greek consumers.

International

The principles of unity and universality37 pervade the rationale of Greek law38 that is applied in insolvency proceedings initiated in Greece. EU Regulation 1346/2000, and all later amendments, were integrated into the Greek insolvency laws in May 2002. Similarly, the UNCITRAL Model Law on Cross-Border Insolvency was implemented almost in its entirety through Law 3858/2010.

Nonetheless, Greek jurisprudence on international insolvency cases is very poor. In fact, there are two main cases39 that were successfully tried before the Greek courts, regarding the recognition of a foreign decision and the initiation of secondary bankruptcy proceedings.

Many provisions of the EU Regulation have superseded any bilateral or multilateral agreements on insolvency proceedings or recognition of foreign decisions. Unlike France and Italy, Greece has not signed any respective agreements and thus EU Regulation 1346/2000 remains in full force.

According to Article 81 of the Treaty on the European Union and Articles 7 and 35 of Law 3858/2010 on cross-border insolvency, the Greek courts must cooperate with foreign courts or foreign insolvency administrators directly or through such administrators. Similarly, the Greek courts are entitled to communicate directly, request information or judicial assistance from foreign courts or foreign insolvency administrators, or coordinate cross-border insolvency proceedings with other participant Member States. Although these provisions have stood for a considerable period, no respective cases have been reported.

A recent development in the European Union concerns the abolition of EU Regulation 1346/2000 on 26 June 2017. Any and all insolvency proceedings commencing thereafter are governed by EU Regulation 2015/848, as amended by EU Regulation 2017/353. Many novelties of EU Regulation 2015/848 have already been implemented in the Bankruptcy Code through Law 4336/2016, such as the introduction of the insolvency practitioner and the rescue of viable companies, while the Commission's recommendations have also been implemented by virtue of Law 4446/2016, including the expedited restructuring procedures and the rules for granting a second chance to honest entrepreneurs. Other novelties, such as the registry of insolvency, the interconnection with the respective registries of other Member States, publication to another Member State, and the cooperation of insolvency practitioners in both main and secondary insolvency proceedings either may be implemented through further amendments to the Bankruptcy Code or the new regulation will be directly applied to cross-border insolvency cases.

Future developments

The amendments to the restructuring procedure follow the trends of European law and the current practices and needs of the Greek market. For the first time, creditors are also entitled to file a pre-pack without the consent of the debtor, if the debtor is in permanent cessation of payments. This is a crucial provision, as creditors have a chance to rehabilitate entities with growth potential, despite their permanent cessation of payments. It is likely that the law will extend this right also in cases of debtors with imminent cessation of payments, as this will help even more creditors who are 'trapped' owing to misleading practices by their debtors. It should be noted that a proposal to extend the scope of this procedure as aforementioned cannot be confused with the bankruptcy procedure, in which case only the debtor can file a bankruptcy petition due to imminent cessation of payments. This distinction lies at the heart of restructuring; creditors grant a second chance to businesses that are viable and can grow further, with a good business plan, if they are released from their bad management or inefficiencies of their owners.

Moreover, the abolition of the special liquidation procedure, as is mentioned above, highlights the importance of the special administration procedure. In order for special administration to play the role required today, some amendments should also take place, such as (1) the provision of the debtor's right to file for a special administration procedure, as can be initiated only by creditors, and (2) the extension of the special administration's scope to include imminent cessation of payments as well as probability of insolvency as events or conditions for the initiation of such a procedure. Finally, a boost has been given to the Greek economy and all pre-bankruptcy procedures have been accelerated to attract foreign investors and thus there are increased chances to effectively restructure and ultimately rescue distressed Greek companies.

Footnotes

1 Dorotheos Samoladas is a partner, Sofrini Sideri is a junior associate and Danai Kyriakantonaki is a trainee lawyer at Sarantitis Law Firm.

2 BBC. Coronavirus: A visual guide to the economic impact.

4 Executive Committee Act 118/19.05.2017 'Framework of establishment and operation of credit servicing firms (Law 4354/2015) – Replacement of Executive Committee Act 95/27.5.2016'.

5 Article 65, Paragraph 2 of Law 4472/2017.

7 Financial Stability Review May 2022.

9 Article 75 of the Bankruptcy Law.

10 According to the Paragraph 6 of Article 79 of the Bankruptcy Law, the debtor must also submit their financial statements, if applicable, for the latest available fiscal year as well as certificates witnessing the amounts of their debts, issued by the state. Otherwise, the petition will be dismissed as inadmissible.

11 Article 77, Paragraph 3 of the Bankruptcy Law.

12 Article 81, Paragraph 2 of the Bankruptcy Law.

13 Article 153, Paragraphs 3 and 4 of the Bankruptcy Law.

14 Article 31 of the Bankruptcy Law as amended by Article 34, Paragraph 10 of Law 4818/2021.

15 Decision No. 5461/2014 of the Single-Member Court of Appeals of Athens.

16 The old provision is the Legislative Decree 400/1970, as amended by the Presidential Decree 332/2003.

17 As amended by Law 4680/2020.

18 Law 4514/2018 implemented Directive 2014/65 (MiFID II).

19 Article 111 of Article 2 of Law 4335/2015.

20 The claims of the state shall be announced without the above-mentioned time restriction no later than the drafting of the final distribution board. The deadline for the announcements is suspended from 1 to 31 August pursuant to Article 153 Paragraph 1 of the Bankruptcy Law.

21 General privileges include financing of the debtor for its continuing operations, claims arising from the contribution of goods and services to the debtor, based on the restructuring plan, even those that were granted six months, at the maximum, prior to the date of submission of the restructuring agreement for ratification; if the debtor is an individual, costs and expenses for their funeral, hospitalisation, daily necessities; claims from dependent employment agreement, periodical fees for services that arose within two years prior to the filing of bankruptcy, lawyers' fees, value added tax claims, taxes, pension fund claims; and any claims of the state and the prefectures.

22 'Non-exempt' property refers to the bankrupt company's assets as of the date of the bankruptcy's declaration. 'Exempt' property refers to such company's assets that are statutorily exempted from liquidation, such as necessities, family rights, the debtor's personality and their ability to work, rights that are strictly connected to their person (such as the right to use their name, to accept or waive inheritance rights, etc.).

23 Collective creditors are those creditors whose claims arose out of the insolvency practitioner's actions in connection with the bankruptcy proceedings.

24 Article 50 of Law 4174/2013, as amended by Law 4797/2021 and 31 of Law 4321/2015.

25 Article 127, Paragraphs 1 and 2 of the Bankruptcy Law.

26 Article 127, Paragraph 4 of the Bankruptcy Law.

27 Article 117 of the Bankruptcy Law.

28 Article 118 of the Bankruptcy Law.

29 Article 119 of the Bankruptcy Law.

30 Article 120(e) of the Bankruptcy Law.

31 Article 259 of Law 4738/2020. The insolvency practitioner is similarly liable for agents used if they were not entitled to appoint them. Otherwise, the insolvency practitioner's liability is limited to the appointment of such a person and the directions provided.

32 Article 127 of the Bankruptcy Law. The same rules apply to those people who exercised undue influence on directors and managers, holding them jointly liable.

33 Articles 134 and 150 of the Bankruptcy Law, respectively.

35 Law 4354/2015, as recently modified by Article 70 of Law 4389/2016, Article 4 of Law 4393/2016 and Article 48 of Law 4472/2017.

36 Companies established in countries outside the EU may establish a branch in Greece provided that their registered seat is not in a non-cooperative country or in a country with a preferential tax regime.

37 Unity and universality mean that the insolvency procedure, whether of individuals or legal entities, is one and the applicable law is that of the jurisdiction where such a procedure was initiated, and any creditor, regardless of their residence, may participate therein.

38 Both the Bankruptcy Law and the Civil Procedure Code incorporate these principles. In particular, Article 780 of the Civil Procedure Code provides the requirements, regarding the recognition of foreign judicial decisions, that (1) the decision must apply substantive law that is applicable according to the private international rules; (2) the decision must have been issued by the competent jurisdiction, in accordance with the substantive law of the jurisdiction applied; and (3) the decision must not be contrary to moral usage or public order. On the contrary, EU Regulations 1346/2000 and 2015/848 provide for a more simplified recognition procedure, according to which the declaration of bankruptcy from the competent foreign courts is automatically recognised in other foreign courts, starting from the date of such a declaration's legal effects. The only exceptions to the automatic recognition are those of public order and individual rights.

39 Decision No. 494/2014 of the Single-Member Court of First Instance in Kos and Decision No. 437/2013 of the Multi-Member Court of First Instance in Athens.

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