Small businesses, freelancers and natural persons have the possibility from 1 June 2021 to settle their debts to banks, loan managers, public and insurance funds, either through the electronic platform of the out-of-court debt settlement mechanism or through the consolidation process.

The consolidation process must be accompanied by a business plan with a duration equal to that of the agreement, which is approved by the contracting parties.

The reorganization process is a collective pre-bankruptcy process, which aims to preserve, utilize, restructure and restore the business, provided that the principle of non-deterioration of the position of creditors is met.

"Principle of non-deterioration" means that a non-consenting creditor should not be in a worse position than he would be in the event of the debtor's bankruptcy.

Beneficiaries are natural or legal persons – debtors who carry out business activity based in Greece or who are in a present or threatened inability to fulfill overdue financial obligations in their entirety, or there is simply a possibility of their insolvency.

The competent court is the Multi-Member Court of First Instance, which judges by the process of voluntary jurisdiction and the decisions are not subject to regular or extraordinary remedies, unless otherwise specified.


Debtor-initiated Resolution Agreement:
– It is necessary to provide the consent of the affected creditors, who represent more than 50% of the claims that have a special privilege (mortgage, mortgage note, pledge, etc.) and more than 50% of the other claims, in any case of those affected from the resolution agreement.

– Θεωρείται ότι δεν θίγεται η απαίτηση ενός πιστωτή όταν, κατά τη συμφωνία εξυγίανσης, δεν επηρεάζεται η νομική κατάσταση που είχε πριν από την επικύρωση της συμφωνίας εξυγίανσης.

– The calculation of the majority percentage for the consent of creditors is calculated on the basis of the Statement of Creditors, which must be attached to the agreement, include all creditors, regardless of privileges, who had claims even if not due against the debtor and have a date no earlier than 3 calendar months from the date of submission of the agreement to the court.

– conditional claims of any nature are not taken into account.

Consolidation Agreement at the sole initiative of creditors who gather the necessary majority and without the cooperation of the debtor, only in the following cases:
– if the debtor is, at the time of the conclusion of the agreement, in suspension of payments or,

– if it is a capital company, as long as the debtor's total equity is less than 1/10 of the company's capital, or

– if the debtor has not submitted for registration financial statements for at least 2 consecutive years, or,

– if it is a limited liability company, as long as the conditions for its dissolution are met.

In the case of the debtor's consent and a partnership of shareholders (meeting of shareholders):
– If the debtor is a legal entity, its consent to the reorganization agreement is provided exclusively by a decision of the management and not by a decision of the shareholders (AG), even in the event that according to the law a shareholders' decision is required (e.g. capital increase, transfer of company property).

– If the cooperation or consent of the partners is exceptionally required, the court has the discretion to appoint a special trustee, with the power to convene a general meeting and to exercise the right of representation and voting of those shareholders or partners of the debtor who do not cooperate.

- The non-cooperating shareholders or partners retain the right to compensation against the company and the creditors, in the event that in the context of a diagnostic trial it is proven that after the liquidation their residual claim would remain

Consent of the public and public bodies:
– The public, Legal Entities under Public Law, public enterprises and Social Security agencies, consent to the conclusion of a consolidation agreement by only signing the agreement.

– They are deemed to consent even if they do not sign the agreement, in case the following conditions are met:

a) when the certified basic debt to them at the time of signing the resolution agreement does not exceed the amount of 15,000,000 euros,

b) when it is ascertained by an expert report that they will not be worse off in terms of their claims at the time of signing the agreement than they would be in the event of bankruptcy, and

c) when, according to an expert's report, their confirmed claims are an amount smaller than the total claims of private creditors.

The resolution agreement

The consolidation agreement can have as its object any arrangement concerning the financial situation (assets or liabilities) of the debtor. The law specifically provides for the following regulations:

– Unlimited change of the terms of the debtor's obligations to all creditors, including current or concluded arrangements with public bodies or Social Security bodies. (e.g. change of time of fulfillment, change of interest rate, etc.),

– Capitalization of the debtor's obligations by issuing shares of any kind or, as the case may be, corporate shares,

– Regulation of the relations of creditors among themselves after the ratification of the agreement (indicative possibility of repayment of one category of creditors only if another category is fully satisfied, regulation of management issues of the debtor's business after the capitalization of creditors' claims),

– Reduction of claims against the debtor,

- sale of assets or part of them, payment of additional amounts in case of improvement of the debtor's financial position,

– Assigning the management of the debtor’s business to a third party based on any legal relationship, including but not limited to the lease or the management contract,

– Transfer of business (or part of it) to a third party,

– Suspension of individual and collective prosecutions of creditors,

– Obtaining interim or new financing,

– Appointment of a person who will oversee the execution of the terms of the agreement.

– Payment of additional amounts to pay off claims in the event of an improvement in the debtor's financial position

Judicial validation process

The reorganization agreement is concluded with a private document [unless the obligations undertaken require the drawing up of a public document (e.g. amendment of the articles of incorporation of the LLC)] and is accompanied by a business plan, while in no case is it valid unless it is ratified by the court (unless at the will of the contracting parties, all or part of its terms apply to each other and without the ratification according to the provisions of common law), according to the following:

– Submission of a validation application to the Multi-Member Court of First Instance of the district where the debtor has the center of his main interests, either by the creditors (when there is no joint debtor), or by the debtor.

Necessary formal information is the identity of the debtor, financial information (assets-liabilities), description of the parties and claims affected, categories of creditors, description of the terms of the proposed arrangement.

Accompanying documents are:

– Agreement, financial statements, statement of creditors, certificates of debts to the State or other documents as the case may be

– Expert report, which contains a financial analysis of the support of the terms of the agreement, as well as a certificate of the validity of the data of the creditor situation (Essentially analyzes to the judge financial conditions of viability of the debtor).

– Especially in the event that the agreement is entered into without the cooperation of the debtor, a bankruptcy petition is also submitted, which if not submitted entails the inadmissibility of the validation application, in case the debtor is already in default of payments.

Then the process is as follows:

– The validation application is discussed within two months of its submission.

– In the relevant discussion, the debtor must be summoned at least 20 days before, in the event that the agreement was concluded at the sole initiative of the creditors, otherwise the discussion is inadmissible

– The application is published within 5 days in the Electronic Credit Register. If the e-mail address of the affected parties is known, the applicant must notify within 20 days of publication and no later than 2 days before the discussion of the application.

- In addition, anyone with a legal interest can intervene orally, and in particular a representative of the employees, while the judge can summon any person, if he deems it necessary.

– As long as there are demands on the public and other public bodies, their summons is mandatory.

Results of filing the application

From the filing of the application until the issuance of a decision and for a period that cannot exceed 4 months, the following shall apply to the debtor (with the possibility of extension also to the guarantor or co-debtors):

– Automatic suspension of individual and collective measures to enforce claims that have arisen until a decision is issued. Therefore, the filing-adjudication of lawsuits or the simple service of a payment order is allowed.

– Suspension of the possibility of taking injunctive measures ((confiscation, pre-notification, removal or movement of movable things of the company)

– Prohibition of disposal of real estate and equipment of the debtor's business

– Suspension of deadlines and prescription of creditors' claims, as well as the rights of guarantors and co-debtors,

– Possibly also prohibition (by court order) of termination of contracts

– Prohibition of set-off of claims that arose before the filing of the application.

Agreement validation

The court validates the agreement if it is signed by the debtor and the required majorities of the creditors or only by the creditors (in case there is no joint debtor).

If the necessary majorities are not present, the agreement is ratified when:

– Has been approved by creditors representing more than 60% of all claims against the debtor and more than 50% of privileged claims

– Affected creditors who have not consented are treated more favorably than other non-priority creditors

– No class of affected parties may receive a value greater than their total claim to the debtor

– Especially for very small businesses, the agreement must have been proposed by the debtor or his consent secured,

In addition, it is required in any case:

– Probability of the viability of the business and the non-deterioration of the creditors' position by the agreement

– The absence of malice or violation of mandatory law, in particular competition law

– Equal treatment of all creditors

– Debtor's consent or lack of intervention until the discussion of the application for validation against its acceptance (in cases where the agreement is signed exclusively by the creditors), or intervention without proof of the deterioration of his legal and financial situation.

The Court does not validate when:

– The above conditions are not met

– It is likely that with the reorganization agreement there will still be a suspension of payments, in which case it declares bankruptcy, if a relevant application has already been filed.

It is noted that the possibility of a third-party appeal is provided upon validation by a non-party (30 days from publication in the register).

Application validation results

The application validation results are:

– Binding of all creditors, even those whose claims have not been included in the agreement, as long as they were born before the decision was issued.

– Limiting the obligations of guarantors or co-debtors up to the amount of the claim that is regulated, only with the consent of creditors.

- Debtor's liability towards a guarantor or co-debtor, in case they satisfied creditors' claims (right of recourse).

– Restore the ability to issue checks.

– Suspension of criminal prosecution for the crimes of issuing a bad check and late payment of debts to insurance funds ceases to be valid, as long as the relevant acts were performed before the submission of the validation application.

- Awareness of regulated debts to the State and Social Security Agencies.

– Removal of seizures (if this is provided for in the agreement)

– The resolution agreement is an enforceable title.

Other possibilities

In case of rejection of the validation application, there is a possibility of appeal only by the applicant.

In addition, there is the possibility of amending the ratified resolution agreement (reform request), if there is a subsequent agreement of all parties and a relevant expert report. During this procedure, only intervention is allowed, while against the decision that rejects the application, an appeal is allowed only by the applicant and not a third-party appeal.

Furthermore, there is the possibility of canceling the consolidation agreement, if the debtor's fraud or collusion with a creditor or a third party is proven, and in particular due to concealment of assets or inflating liabilities.

With the annulment decision, the creditors are released from the agreement, while the debtor is only released if there is no bona fide third party who acquired a property right under the agreement.