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Position of creditors

Forms of security

What are the main forms of security over moveable and immoveable property and how are they given legal effect?

The main form of security established over immovable property (including certain movable assets: eg, vessels) is mortgage. In the case of real estate only, pre-notation of mortgage is the usual form of security. They are established through a court order and registration of the relevant security with the public books. 

Movable property may be subject to a pledge or fixed and floating charges.

According to the Civil Code and special legislation, a pledge may be established over claims, bank accounts and shares. A security right may also be created over financial collateral arrangements.

Ranking of creditors

How are creditors’ claims ranked in insolvency proceedings?

Creditors bankruptcy liquidation claims are classified into the following categories:

  • Costs pre-deducted from the liquidation proceeds before the satisfaction of any other class of creditors, including:
    • judicial fees relating to the administration of the bankruptcy estate; and
    • claims of the group creditors (arising in the course of bankruptcy and as a result thereof).
  • Claims that are equipped with a special privilege over certain movable or immovable property or money including claims:
    • for expenses incurred in the six months before the declaration of bankruptcy with the view to maintaining the particular asset;
    • for the capital and interest accrued within the last two years for claims secured with an in rem security (pledge, pre-notice or mortgage); and
    • for expenses incurred for the production and harvesting of crops.
  • Claims that are equipped with a general privilege, including claims:
    • for new money injected or goods or services provided to ensure the continuation of the company’s activities and payments under a rehabilitation agreement, reorganisation plan or special administration procedure;
    • from dependent employees and lawyers;
    • from the state for value added tax and withholding taxes imposed with surcharges of any nature;
    • from social security organisations; and
    • from the state and local government bodies for all causes.
  • Unsecured claims and claims of secured creditors whose security does not suffice for the full satisfaction of their claims.

If more classes of creditors concur, after payment of pre-deducted claims (and if new money claims concur with unsecured claims following full repayment of the first category), creditors are satisfied as follows:  

Concurrent creditors

Percentages of liquidation proceeds for the satisfaction of claims


Generally privileged





Secured (excluding specific claims)

Generally privileged







Generally privileged





Notably, Law 4512/2018 introduced a differentiated ranking system, which is applicable in parallel with the above ranking, specifically for claims made after January 17 2018 (ie, the date of entry into force of the law) which are secured with a pledge or a mortgage over any asset (which had not previously been encumbered).

According to this ranking system, the above classes of creditors are satisfied in the following order:

  • pre-deducted claims;
  • claims of employees for salaries of up to 6 months up to a certain amount, which may be calculated on the basis of the law;
  • claims for new money;
  • secured claims (excluding specific claims);
  • generally privileged claims  and remaining secured claims; and
  • unsecured claims.

‚ÄčCan this ranking be amended in any way?

The Bankruptcy Code provisions on creditors’ rankings are considered mandatory (ius cogens) and may not be amended through relevant contractual arrangements. Certain provisions of law refer to ‘creditors ranking last’ (subordinated creditors) (ie, even after unsecured creditors). However, contractual arrangements altering the core provisions on ranking may not be followed in case of bankruptcy to the extent that they contravene mandatory code provisions.

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