GREECE Law and Practice Contributed by: Betty Smyrniou, Bahas, Gramatidis & Partners
2.9.2 Overview of Relevant Types of Voluntary and Involuntary Restructurings, Reorganisations, Insolvencies and Receivership Within the framework of pre-bankruptcy proceed - ings, rehabilitation/reorganisation proceedings aim at reaching a settlement/rehabilitation agreement between the debtor and its creditors rather than liq - uidating the assets. The reorganisation agreement is validated by the court. The Out-of-Court Workout is a new procedure carried out electronically via a public electronic platform. It commences once the debtor or certain types of credi - tors (financial institutions, the State, social security funds) file an online application via the platform to the competent authority. A restructuring agreement is entered into, and the creditors that are legally bound by the agreement may not proceed with any enforcement proceedings against the debtor. Bankruptcy is a process that aims to repay the debt - or’s debts to creditors using the debtor’s assets. This can be done by liquidating the assets at a public auc - tion or through the sale of the debtor’s business. When a debtor consistently and generally fails to pay their debts, a bankruptcy application can be filed. This application may be submitted by the debtor them - selves, a creditor or the district attorney. They will sub - mit this application to the appropriate court to declare the debtor bankrupt. If the court accepts the application, a supervising judge and a bankruptcy trustee are subsequently appointed. 2.9.3 Co-Ordination, Recognition or Relief in Connection With Overseas Proceedings Greek Law 3858/2010 enacted the UNCITRAL Model Law and introduces the prospect of cross-border co-operation where there are overseas proceedings. The UNCITRAL Model Law is regarded as necessary for promoting international co-operation in cases of cross-border insolvency. The law also provides for the
recognition of a foreign judicial decision of an insol - vency process, following a Greek judicial decision recognising the foreign decision. EU Regulation 2015/848 on insolvency proceedings provides for the immediate recognition of judicial deci - sions related to restructuring or insolvency proceed - ings issued by foreign EU courts. In particular, any judicial decision related to restructuring or insolvency proceedings issued by the competent courts of an EU member state has direct effect in any other EU member state. 2.9.4 Effect of Lessee’s Insolvency on a Deregistration Power of Attorney The lessee’s insolvency does not affect a DerPoA if it is irrevocable. 2.9.5 Other Effects of a Lessee’s Insolvency When the lessee of an aircraft, who is in possession of that aircraft, is put into liquidation, administration or a similar process, the following generally applies: • the bankruptcy trustee may elect to not continue the performance of the lease; • the lessor may encounter delays in repossessing the aircraft on termination of the lease if the lease was not terminated before the date of the bank- ruptcy judgment; • the aircraft will not be deemed to be part of the les - see’s property; and • the liquidator/administrator may not prioritise the rights of any other ordinary creditors over those of the lessor. 2.9.6 Risks for a Lender if a Borrower, Guarantor or Security Provider Becomes Insolvent The main risk for a lender if a borrower, guarantor or entity providing security becomes insolvent is that the lender’s claims will not be satisfied, except if security has been granted on the aircraft. If there are insuf - ficient assets to cover the lender’s payment, or in the absence of security, the lender will be treated like other unsecured creditors.
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