Out-of-court compromise procedure to be offered to all enterprises

Economy ministry has completed a draft bill offering out-of-court compromise to Greek companies and plans to submit the bill for approval to Parliament this month,according to ministry sources.

The sources said that this is an integrated, quick and economical solution offered for the first time with an out-of-court procedure, allowing a company tosettle all debts to all creditors, ie banks, tax agency, insurance funds and suppliers.

With the consent of the majority of creditors a company can achieve a sustainable solution that is imposed on the minority.

Also with a clever but indirect way (with a minimum quorum) banks are forced to come to the negotiation table and to find durable solutions. Arrangements and debt write-offs are also envisaged to the public, ie tax authorities and social security funds, to the benefit of both businesses which will continue to operate, and the public which will continue to collect debts from viable enterprises that will avoid bankruptcy.

Also for the first time the actual company’s repayment ability is assessed and a repayment plan of all debts will be formed based on this (and not vice versa as hitherto in practice). The law may benefit all small, medium and large companies and individual businesses, but not part self-employed professional, since they have the opportunity to qualify for the benefits of a Katseli law.

Economy ministry sources said that with regard to banking executives and civil servants involved in debt settlement procedures the new bill will not offer immunity, but protection from lawsuits. Each complaint will be checked by the general inspector of Public Administration for civil servants and the Bank of Greece for bank employees.