Following our request and the appropriate substantiation submitted on behalf of our client, the KEVEIS (Center for the Collection of Public Revenue Debts) of Attica issued a certificate of public debts, from which it appears that our client has been released from joint liability for debts amounting to a total of EUR 992,880.91. This release concerns debts incurred by a legal entity in which our client served as a representative and which was declared bankrupt in 2013.
This release was certified by KEVEIS Attica pursuant to Article 263 para. 6 of Law 4738/2020, which states: "Article 195 also applies to the discharge of representatives of legal entities from debts of a legal entity for which the bankruptcy petition or declaration preceded the entry into force of the present law." The debts in question related to the period of thirty-six (36) months preceding the so-called suspect period as determined by the Bankruptcy Court, in accordance with Article 195 of the same law, which provides: "A natural person who, by virtue of the law, bears joint and several liability due to their capacity as a representative or officer of the debtor legal entity shall be discharged from any liability for the debts of the debtor which arose during the suspect period (as defined in Article 116), or during the thirty-six (36) months prior to the suspect period, upon the lapse of thirty-six (36) months from the filing of the bankruptcy petition, or twenty-four (24) months from the declaration of bankruptcy or from the registration referred to in Article 77(4), whichever occurs earlier—unless, within this timeframe, an objection is lodged by a party with a legitimate interest against the discharge."
As we have also pointed out elsewhere: "A significant paradigm shift was introduced with Article 195 of the new Bankruptcy Code. According to the explanatory memorandum of the law, this provision was, among other reasons, introduced in recognition of the fact that the personal liability of representatives of legal entities in case of bankruptcy of the latter acts as a disincentive to entrepreneurship, and discourages competent managers from undertaking the administration of businesses in financial distress—ultimately to the detriment of economic development. Thus, under the regime of the new Bankruptcy Code, debts of a legal entity that, under special provisions, also burden other individuals (i.e., jointly liable parties in legal terms) are written off. As clarified in the explanatory memorandum, 'Article 195, being a special provision, prevails over any other provisions imposing joint and several liability on the representatives of legal entities.'"
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