GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
ally agreed upon will generally not be binding on the insolvency administrator or other creditors who were not party to the agreement, since Greek insolvency law provides a mandatory statutory ranking of claims. 5.8 Priming Liens and/or Claims The most common security interests arising by opera - tion of law include statutory pledges. A landlord, a hotelier, and carriers or warehousemen benefit from statutory pledges over (respectively) a tenant’s mov - able assets, guests’ items, and goods transported or stored, to secure unpaid rent, accommodation charg - es or freight/storage fees. Pursuant to Article 6 (1) of Greek Law 2844/2000, statutory pledges rank junior to duly perfected consensual pledges, which are reg - istered in the Pledge Registry. In addition, pursuant to Article 325 of the Greek Civil Code, a creditor in lawful possession of a movable asset may exercise a right of retention, entitling it to withhold delivery of such asset for as long as it has a due and payable claim related thereto. The exer - cise of such right may effectively prevent enforce - ment by a secured creditor until the relevant claim is discharged. In practice, account banks typically benefit from a contractual right of retention over bank accounts maintained with them, pursuant to their gen - eral terms and conditions, in respect of any claims they may have against their customers. It is unusual to require a waiver of retention rights. Furthermore, Greek law recognises statutory privi - leges, including general privileges under the Greek Code of Civil Procedure, which may affect the pri - ority of distributions in enforcement or insolvency proceedings. Certain privileged claims, such as tax, social security and employee claims, may rank ahead of secured claims, subject to statutory exceptions. For this reason, lenders commonly rely on financial collat - eral security over cash or financial instruments, which benefits from enhanced protection and out-of-court enforcement. Where second lien structures are implemented, com -
• standstill periods for enforcement by junior credi - tors; • restrictions on amendments or increases of junior debt; and • detailed enforcement mechanics governing the exercise of remedies and the application of pro - ceeds. 5.9 Cash Pooling and Hedging/Cash Management Obligations Cash pooling is increasingly used by corporate groups to manage short-term liquidity. Operational cash pool - ing accounts are usually excluded from the security package. Secured hedging is common in large cor - porate and project finance. Hedging counterparties typically participate in the intercreditor agreement and share the security package on a pari passu basis. 5.10 Appointment of Collateral Agent The role of a security agent is recognised in the bond loan framework, under which any security by the bor - rower is granted in the name of the Bondholder Agent, for the benefit of the bondholders. Furthermore, under Article 73 paragraph 3 of the Company Law, if the bond loan is governed by foreign law, collateral and guarantees are granted in the name of the person holding them on behalf of bondholders under that law. Under the Greek Civil Code, security interests are ancillary to the underlying claim. Upon loan assign - ment, associated mortgages and pledges are trans - ferred to the new lender by operation of law. While this transfer is automatic, it must be registered in the relevant public records to ensure enforceability against third parties, serving as an administrative update rather than a new grant. Bond transfers do not require updates to security filings, since the holder is the bondholder agent. 6. Enforcement 6.1 Enforcement of Collateral by Non-Bank Secured Lenders A secured lender can enforce its collateral in Greece when:
mon intercreditor provisions include: • contractual subordination of payment; • turnover obligations;
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