Clawing back assets in Greek insolvency proceedings by Yiannis G. Sakkas and Yiannis G. Bazinas

Asset depletion is predominantly driven by the debtors’ tendency to place significant parts of the insolvency estate beyond the reach of creditors.

Especially in strained economic times, to which Greece is no stranger, asset-stripping at a diminished or no value, as well as the preferential treatment of creditors, are frequent in cases of debtors nearing insolvency. In these conditions, the avoidance provisions of the Greek Insolvency Code (the “IC”) have an important role in the efficient operation of insolvency proceedings. By express stipulation in the Code, the insolvency is terminated if there are no more assets to finance its operations. Therefore, it is crucial for the revocation framework in place to be effective in clawing back assets to the estate, to ensure both the continuation of proceedings and the collective satisfaction of creditors. Even more so, under domestic rules, impeachable dispositions may even lead to the de facto avoidance of an ill-intended debtor’s insolvency.