June 2022

Interim Order of the Athens Court of First Instance appointing an interim administration AE

Recently (6.6.2022) a temporary order was issued by the Athens Court of First Instance, by which a temporary administration of a joint stock real estate management company was appointed, following the intervention of one of its shareholders - our client. In the latter, the shareholder requested the inclusion of a person nominated by him in the company's board of directors. In particular, at the request of a credit institution (which allegedly acted, in this case, as the representative of an alleged claim of bondholders' creditors), an interim order was issued (pending the discussion of the main application) appointing the management of the above limited company, which lacked a board of directors, following the expiry of its term of office. The shareholder of the company, having a legitimate interest in intervening in the hearing of the main application, lodged an intervention after being informed, through a check of the General Register of Companies, of the existence of a main application for the appointment of a board of directors and of a provisional order already granted appointing provisional members (nominated by the applicant credit institution), requesting that the management of the company include a person nominated by the shareholder. At the hearing of the main application, the shareholder requested, in the main proceedings, that the provisional order issued without his knowledge be amended so that the person proposed in the main application could be appointed as a member of the management before the final decision on the application was taken. The court granted the shareholder's request by appointing the person proposed by the shareholder as a member of the management board. The truth is that, in many cases, credit institutions take such steps (filing a petition for the appointment of a board of directors) in order to assert their claims against public limited companies without management and to legally notify documents and procedural acts. Since the summoning of the shareholders to such a court is not mandatory (i.e. the judge may not order it), the latter should make a check with the General Registry in order to be able to request, through their intervention, either the rejection of the application or, as in the present case, the appointment of members proposed by them. By means of the latter right, the shareholders may defend the interests of the legal person against arbitrary and discriminatory actions by creditors. Otherwise, they would not be able to take cognisance of the documents served on them, nor would they be able to exercise the appropriate legal remedies. Of course, if there is a consensus among the shareholders, there is also the possibility of convening a general meeting for the election of a regular board of directors, with the automatic expiry of the temporary board of directors. 

(For more on the issues involved in appointing an interim administration, see here)