February 2020

Judgment of the Athens Court of First Instance on the Prohibition of Termination of Credit Agreements

The Athens Court of First Instance (injunctive relief) issued decision no. 753/2020 prohibiting the termination of credit agreements for an alleged amount of approximately EUR 5.5 million with the threat of a fine and personal detention of the representative of the opposing party's Claims Management Company (Fund). It is the first judgment against a Fund that accepts the obligation to comply with the Code of Conduct and that claims for damages against the credit institution that transferred its receivables can also be brought against the transferee Claims Management Company. The Court held, inter alia: 'Furthermore, as a consequence of the nonrelease of the above-mentioned loan amount, which represented 8% of the balance of EUR 1,320,000, the first applicant suffered losses, as the lost profits from the non-leasing of the property in question, which would have taken place in September 2012 and to date, on the basis of the business plan and the corresponding appraisal study, would have amounted to a total of EUR 1,344,787 [...]. ] Subsequently, the letter of 25/6/2019 proposing a loan arrangement was sent to the second applicant, setting a 10-day deadline for her to reply whether or not she accepts it, and on 12/7/2019 the letter to the first applicant stating that she refuses the application of the CBA and proposing not a settlement solution but the immediate and irrevocable proxy liquidation of the disputed property within 3 months at a minimum price of 1. 800 000 euro, the pledging of shares in the latter, and the provision of a guarantee by the latter'.