January 2024

Decisions on the Suspension of the Auction under Article 1000 of the Greek Civil Code of Real Estate with first offer prices of approximately EUR 2.600.000

Decisions 130/2024 and 131/2024 of the Athens Court of First Instance (injunction proceedings) were issued, which suspended, under the conditions of article 1000 of the Code of Civil Procedure, the auctions of commercial real estate of our client - a construction company, which were accelerated by a debt management company.

The court granted the requested suspension on the assumption that, within the next six (6) months - which is the maximum permissible suspension period - the debtor will satisfy the foreclosing company. Accordingly, the court suspended the auctions in question, subject to the payment of the acceleration costs and ¼ of the principal amount due to the Servicer. It should be noted that the seizures in question were imposed, following a limitation of the claims, for an amount less than that of the alleged claim. Therefore, the 1/4th of the payment for the suspension was held to be determined not on the basis of the alleged total debt but on the basis of the amount for which the seizure is levied. In fact, if payments have been made on this amount in the meantime, the amount ultimately paid to grant the stay will be even less.

The court's presumption of the satisfaction of the Servicer was based on the debtor's advanced negotiations with another credit institution with a view to refinancing its debts, including to the opposing party. According to the decisive considerations of the abovementioned decisions: "Furthermore, it is likely that the applicant will be able to pay the entire debt for which the enforcement proceedings are being accelerated within six months, since it is expected that the efforts to refinance its debts with the banking company "...", from which it has already obtained pre-approval for the purpose of repaying all its debts to banking institutions and debt management companies, will be successful"

The crucial point in the present case is therefore that the probability of covering the debt in order to grant the suspension does not refer to the total debt but to the debt for which the seizure has taken place. Therefore, we observe that the amount for which the seizure has taken place (which in most cases is far less than the alleged debt to avoid costs on the part of the Servicer) is relevant not only for the calculation of the 1/4th of the payment under the suspension of the a. 1000 CCC but also for the probability of repayment/settlement of the claim.

The court's considerations regarding the lack of risk of harm to the Servicer from the postponement of the auctions in question are also interesting: "[...] Moreover, it is not likely that there is any risk of harm to the defendant as a result of that postponement, particularly in view of the fact that the first bid price of the properties to be auctioned has been set at € ..., which exceeds the amount of the claim for which enforcement proceedings are being brought against the applicant, while it will also have received ¼ of the principal of the claim for which enforcement proceedings are being brought (...). the payment of ¼ of the capital due relates to the capital of the claim and to the amount of the attachment imposed ...), since otherwise, if the relevant condition is not fulfilled, the auction may be held on the date set".