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September 2023

Judgment of the Athens Court of First Instance on the Non-Binding of Creditors under a Confirmed Resolution Agreement

Judgment of the Athens Court of First Instance on the Non-Binding of Creditors under a Confirmed Resolution Agreement

Judgment No 5052/2023 of the Single Judge of the Court of First Instance has recently been delivered. The latter ruled that our client, a company operating in the energy sector, is entitled to claim its outstanding debts from its counterparty, a limited company in reorganisation proceedings. This is because the claims in question arose after the adoption of the decision confirming the reorganisation agreement (in accordance with the specific provisions of Article 106c of the previous CC and the current Article 60(1)(b)). 2 ν. 4738/2020 according to which: "Creditors whose claims arose after the issuance of the decision confirming the reorganisation agreement are not bound (i.e. by the reorganisation agreement)"}. According to the judgment, such a claim can in no way be classified as abusive, as the debtor company claims (the contested passage of the judgment reads as follows: "In the above sense, the defendant's conduct cannot be classified as abusive as the rights it exercises are in accordance with the law and the contract governing the parties, the applicant's claim in this regard being rejected"). It was further held that our client is entitled to cut off the electricity supply to the debtor - company under reorganization, in the event that the latter a) fails to pay its current - contractual debts (from the issuance of the decision onwards) and b) fails to pay within specified monthly instalments the amount of the total amount of its overdue debt, amounting to approximately €250,000. It is worth noting that the applicant company, which was in the process of being reorganised, was in essence requesting the continuation of the contractual relationship with our client company and, as a result, the continuation of the electricity supply, citing the impossibility of meeting the debts in question and the risk of its ceasing its activity (and, as a result, of jeopardising the reorganisation procedure), while denying our client's right to interrupt the supply services. The court, in combining the interests at stake, granted the applicant the protection sought (continuation of the supply of electricity services), but also recognised the high financial risk to our client from the non-receipt of the claim in question, obviously taking into account the presumed viability of the undertakings in reorganisation. The following passage in that judgment is of interest: 'In order to reconcile the conflicting interests, it is therefore considered that, on the one hand, the first defendant should not interrupt the electricity supply and, on the other hand, the applicant should be as consistent as possible, taking into account the financial risks that this entails for the first defendant'.

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