GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
5.6 Release of Typical Forms of Security A voluntary sale of mortgaged real estate or pledged assets does not automatically release the security. The encumbrance “follows” the asset to the new owner. The consensual release of real estate security in Greece requires the explicit consent of the creditor and formal registration in public records (land regis - try or cadastre). For mortgages, a notarial deed of release signed by the parties is required. For pledges perfected by the physical delivery of the asset to the creditor or a custodian, the security is released when the asset is returned to the owner. The release of pledges registered in the Electronic Pledge Register is effected digitally through the Register. A guarantee is consensually released when the creditor confirms that the principal debt has been paid in full. No formal registration is needed but the guarantor will typically request a written confirmation letter from the creditor. 5.7 Rules Governing the Priority of Competing Security Interests and/or Claims Greece recognises and permits multiple liens (encum - brances) on the same asset. Among multiple security interests, the one that was perfected earlier in time (eg, the date of registration for a mortgage) ranks high - er. Interests perfected on the same day rank equally (pari passu). In the case of non-possessory pledges, the mutual priority of two or more secured creditors may be con - tractually altered by means of a written agreement, provided it is subject to the registration requirements. Furthermore, it is possible for the pledgor (debtor) and a secured creditor to agree that a future pledge, which has not yet been established, shall take priority for a specific amount. The other existing secured creditors are not affected by these agreements. In addition, creditors in mezzanine or multi-lender financing often use intercreditor agreements, under which subordinated creditors agree to rank below senior creditors with respect to priority in payment, security and enforcement rights. Contractual subordi - nation is recognised under Greek law, and the relevant contractual provisions will survive the insolvency of the debtor; however, they can only affect the priority between secured creditors or subordination of unse - cured claims to secured ones. The ranking contractu -
(especially regarding interest and security). The board must conduct thorough due diligence on the solvency of all counterparties. • The general meeting must provide prior consent via increased quorum and majority. This approval is based on a detailed written report by the board justifying the corporate interest, outlining the terms of the acquisition, and assessing risks to the com - pany’s liquidity and solvency. If board members (of the issuer or the parent) are parties to the transac - tion, a fairness opinion/report by an independent auditor is mandatory. • The total financial assistance granted must not cause the company’s net equity to fall below the aggregate of its paid-up share capital and non- distributable reserves. To ensure this, an amount equal to the total financial assistance provided must be booked as a non-distributable reserve in the company’s financial statements. 5.5 Other Restrictions The primary restrictions relate to financial assistance and related parties’ transactions transparency require - ments, while significant costs involve notarisation and registration fees. No works council or similar approv - als are required. The Greek insolvency framework establishes a “sus - pect period”, prior to a bankruptcy declaration – please refer to 7. Bankruptcy and Insolvency . During this timeframe, certain transactions entered into by a debtor can be challenged or automatically annulled to prevent the unfair depletion of assets. Security granted as financial collateral is generally exempt from claw-back rules. Greek law recognises retention of title (Article 532 of the Greek Civil Code), where the seller retains owner - ship of goods until full payment of the purchase price. In addition, Greek law recognises anti-assignment clauses (Article 464 of the Greek Civil Code). There are exceptions where anti-assignment clauses are overridden by law, such as the sale and transfer of receivables for securitisation purposes, which takes full effect notwithstanding any contractual restrictions.
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