GREECE Law and Practice Contributed by: Panagiotis (Notis) Sardelas, Matina Kagkelari and Aris Sifakis, Sardelas Petsa Law Firm
Transactions for consideration may be challenged if the counterparty knew of the debtor’s payment ces - sation and the act harmed creditors’ collective inter - ests. Where the debtor acted with fraudulent intent, the reach-back extends to five years, provided the third party was aware. Critical safe harbours protect commercial stability: transactions in the ordinary course of business or under a court-ratified rehabilitation agreement are generally exempt from avoidance. 7.7 Set-Off Rights Set-off is generally permitted in insolvency, provided the requirements for mutual claims were met before the declaration of insolvency. In addition, provisions such as netting agreements in financial contracts (eg, ISDA) are generally binding and respected. 7.8 Out-of-Court v In-Court Enforcement A typical private credit out-of-court restructuring aims for rapid consensual solutions to preserve enterprise value, often using amortisation holidays, PIK interest or debt-for-equity swaps. For bond-financed debt, restructuring can involve convertible bonds that con - vert into equity under set conditions. These measures are implemented via intercreditor agreements or the centralised electronic platform. The co-operation of existing equity holders is cru - cial, as their consent is usually required. Additionally, a 60% majority of financial creditors must agree to invoke statutory “cram-down” on dissenting creditors or state entities; without such collective consent, the restructuring remains bilateral and cannot bind non- participating parties. The in-court rehabilitation process offers strategic advantages over consensual workouts. It allows the use of statutory “cram-down” to bind dissenting cred - itors, provided they are no worse off than in liquida - tion, and enables asset transfers free of the debtor’s historical liabilities. New financing is incentivised through a priority (“first-class general privilege”) for repayment. The process also provides legal certainty, including a judicial stay on enforcement actions for up to 12 months and tax exemptions on asset transfers and debt write-offs, creating a secure environment for
private credit investors to execute complex restruc - turings. 7.9 Dissenting Lenders and Non-Consensual Restructurings The Insolvency Code manages dissenting lenders through statutory majority rules and a cross-class cram-down. In-court rehabilitation can be ratified by either a 50% majority across secured and unsecured classes or a 60% overall majority with 50% of secured claims. The electronic platform mandates participa - tion of dissenting state entities and financial creditors once a 60% threshold is met. For private credit structures with bond loans, dissent - ing lenders are often internally crammed down via contractual supermajority provisions at bondholder assemblies. Dissenting lenders are protected during court ratifica - tion through the “best interest of creditors” test, which ensures that no creditor is worse off than in liquidation. The court also enforces principles of equal treatment within the same creditor class and prevents lenders from being forced to inject “new money” against their will. These safeguards allow creditors to object during court hearings or appeals. 7.10 Expedited Restructurings Restructurings in Greece aimed primarily at the bal - ance sheet are typically accomplished through the in-court restructuring procedure or the out-of-court platform described respectively in 7.1 Impact of Insol- vency Processes and 7.4 Rescue or Reorganisation Procedures Other Than Insolvency . Greek courts recognise restructuring support agree - ments as valid contractual obligations. While enforce - ment occurs primarily through the formal ratification of a rehabilitation plan, these agreements serve as cru - cial evidence of creditor consensus; however, clauses that override public policy or impose unenforceable penalties may not be upheld.
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