Athens News Agency: News in English, 07-04-17

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From: The Athens News Agency at <http://www.ana.gr/>

CONTENTS

[01] Cabinet approves new bankruptcy code

[02] Papandreou cites utilities' mismanagement

[01] Cabinet approves new bankruptcy code

After the meeting, Justice Minister Anastasis Papaligouras said the new legal framework represented a fundamental change to a system initially dated to 1835, with a few minor modifications in 1937. He stressed that the new code was designed along radically different lines, with a focus less on organising the break-up or termination of a business and more on keeping businesses alive and giving a second chance to those who go bankrupt in good faith.

Though satisfying the demands of creditors remains the top priority, the justice ministry stressed that the new bill sought to avoid the "cannibalisation" of bankrupt businesses that occurred under the old system, where all their assets were sold in short order to satisfy creditors - including their productive units, so that they were effectively unable to continue operating.

Under the new code, priority will be given to saving those businesses that can be saved through their reconstruction, so that they remain economically active and are able to reimburse their creditors by generating income, as well as by liquidating assets.

The bankruptcy process in Greece - which could previously drag on for up to 30 years - is also greatly speeded up under the new code, while it ensures greater transparency in a bid to protect debtors from illegal exploitation by middle-men who take advantage of their plight, the minister said.

Papaligouras noted that the new bankruptcy code would boost enterprise, protect jobs and better organise the reconstruction of businesses.

Specifically, it provides for the "collective satisfaction of a debtor's creditors through the liquidation of assets or through other means provided by a reconstruction plan, especially by preserving the debtor's business," according to a justice ministry announcement.

According to this, the goal of the new bill is "to preserve the life of the productive unit, for the benefit of the economy of the country and to protect employment".

Businesses that declare bankruptcy will be encouraged to adopt a "Reconstruction Plan" designed to save and utilise their business, which is to be submitted to the courts by the debtor or the receiver within a short deadline. This will be evaluated by the court and will be either accepted or rejected by a meeting of a company's creditors, who will be free to reach a settlement and limit their demands.

In addition, the new law allows those who go bankrupt "in good faith" to start a new business or enter into economic activity without the current unfavourable repercussions of declaring bankruptcy. The "good faith" debtor also enjoys more lenient treatment under the law, with bankruptcy no longer treated as a criminal offence under the law, so that those who unintentionally end up in debt can no longer be jailed or deprived of their political rights.

The bad faith creditor, by contrast, is subject to more severe provisions.

Finally, if the effort to keep the business afloat is unsuccessful, a much faster bankruptcy process is initiated, with ongoing inspection mechanisms that ensure the immediate liquidation of the bankrupt company's assets and their distribution first to the company's most vulnerable creditors - its employees - whose rights are fully protected.

The process is speeded up chiefly by immediately starting liquidation proceedings as soon as debts are ascertained and by processing bankruptcy cases much faster through the courts, while the entire bankruptcy process ends automatically after 15 years.

Courts are also enlisted to supervise and provide guidance in negotiations between a company and its debtors for out-of-court settlements that will avert bankruptcies.

Companies will be auctioned off as a whole by court order through tenders with sealed offers, and piecemeal assets will be sold in open auction to parties that declare that they represent themselves or a specific other, while they will also be required to provide a deposit equal to one third of the initial offer. By this means, the ministry hopes to cut out the middlemen that previously exploited bankruptcy proceedings.

The entire bankruptcy process will also be supervised by a new "creditors committee" made up of three members that represent a company's three different classes of creditors and assist the receiver.

Finally, a simplified and much faster bankruptcy procedure is introduced for small-scale bankruptcies not exceeding 100,000 euros in value - which represent the majority.

Caption: A file photo shows Prime Minister Costas Karamanlis, right, conferring with Justice Minister Anastasis Papaligouras during a Parliament session on Thursday, June 29, 2006. ANA-MPA / K. MAVRONA.

[02] Papandreou cites utilities' mismanagement

"Public utilities are seen as the property of the partisan state and rival government ministers," he charged.

The PASOK leader also pointed out that an effort is being made to control both the public and the private sector through repeated interventions, ones aimed at satisfying different interests.

Papandreou added that state-run utilities and enterprises are of strategic importance for the country's development and constitute essential part of PASOK's programme, while he also pointed out that they became profit-making as a result of measures taken by PASOK governments until 2004.

The PASOK president and former foreign minister stressed that in the past three years state-run utilities and enterprises have slumped, affecting the national economy and the people, with quality dropping and costs rising.

In reference to the pension funds issue, he pointed out that through the "looting of the pension funds" the Greek citizen became deeply aware of ND's attitude and practices.

He underlined that PASOK directs its efforts at economic growth through a "fair redistribution", having as an objective the improvement of the Greek family's finances, whereas the ND government is motivated by party interests.

Finally, he stressed that had ND accepted a 30-point proposal on transparency, suggested by PASOK in November 2005, the looting of pension funds would be impossible, as he noted.

Caption: ANA-MPA file photo of Papandreou.

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