3. Psychological profile of debtors
1. Can I control my debts ?
2. Why my debts was raised ?
3. Who debtor must to pay first ?
4. Do I have professional advisors ?
5. There is an action plan ?
6. Bankruptcy or restructuring
3
4. ABROAD ALSO PROCEDURES IN THE SAME
ORDER FOUND IN THE ENGLISH LAW OF 1870
(JOINT STOCK COMPANIES ARRANGEMENT
ACT), THE GERMAN LEGISLATION OF 1935
(VERGLEICHSORDNUNG), THE AMERICAN LAW
OF CHAPTER X OF THE CHANDLER ACT OF
1938, WHICH BECAME NECESSARY AFTER THE
CRASH 1929 ETC.
Hellenic Law experience / Article 99
(RECONCILIATION BEFORE BANKRUPTCY)
4
5. But today's form of the consolidation
procedures is the starting point of the
economic crisis of the 1970s, when it
began to be institutionalized Newest
sanitizing laws.
Therefore, with an unprecedented economic
crisis experienced by the country is entirely
justified the outbreak of an application for
the provisions of this law.
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6. THEORY: Statutory consolidation procedures or
pre-bankruptcy procedures exist throughout the
civilized world and is caused by statistics that
showed that satisfaction of creditors of a
company that goes bankrupt is practically zero
and, secondly, the finding that save the
company even with sacrifices are beneficial for
national economy from bankruptcy, as stated in
the explanatory memorandum.
6
7. REAL LIFE: THE AVAILABLE
STATISTICS* REVEAL THAT A 20% OF
THE COMPANIES INCLUDED IN
ARTICLE 99 ARE MANAGE TO
RETURN BACK ON PROFITABILITY
*(FROM YEARS 2005-12)
Hellenic Law experience / Article 99
(RECONCILIATION BEFORE BANKRUPTCY)
7
8. Hellenic Law experience / Article 99
(RECONCILIATION MUST HAVE
COLLATERAL…)
For example (Construction company): Finally
has bankrupt leaving 300 workers claiming
salaries of seven months, while the company
after bleeding tens of millions from public
works, continues to operate in Bulgaria
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9. Economic crisis and debtors. We are ready to
face it?
1. How many companies (clients) has
operating Credit Control policy and dept.?
2. Do we have provisions for bad debtors ?
3. Our clients monitoring cash flow ?
Finally Who has the risk?
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11. An interesting survey (the critical
year ..2007) from the ICM on behalf
Euler Hermes
The trend for late payment across Europe
200 -300 billion € amount of receivables
About 80% of all commercial transactions carried
out on credit ...
... Therefore, the analysis of customer behavior in
payments It is particularly important as it affects
their balance sheet
11
12. What methods do you use to improve
your cashflow position? (source: ICM research 2007)
12
13. How prepared is our clients to
bad debtors ?
Written Credit Policy (42% across Europe)
Written Agreements with buyers, (mostly in
Germany, Belgium and U.K.)
Managing credit dept. internally ??
Outsourcing collections (58% across Europe)
Fact: 76% of cash flow at European business
has been affected by late payments (ICM
research)
13
14. Restructuring debts vs auctions.
What is preferable and when
COLLATERAL AUCTION
1. Today’s estimation of value
2. Number of creditors & underwritings
3. State debts (I.R.S. etc)
4. Postponing auction after payments
5. PROFIT ON RESALE OF PROPERTY
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15. Restructuring debts vs auctions.
What is preferable and when
RESTRUCTURING DEBTOR (Key facts)
1. Banks will not grant loans but will use the
NPLs to support the economy.
2. Banks will reducing provisions in b/s
3. The debtor will not lose the property, &
the bank will begin to earn revenues.
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16. Unique and not so unique experience
FACT: The debtor does not pay on purpose
as it considers that it can take much
greater discount of problem loans of
Funds Co. (management of problem loans)
than could be obtained from banks
because the management company will
buy problem loans at a price lower than
the nominal value
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17. Conclusions – what did we learn, what we can apply?
National committee of Commerce (2015):
The "red Consumer loans" have reached
approximately 50% and has exceeded 100
billion Euro. For corporate loans should be
a new framework regulation and
restructuring.
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18. Conclusions – what did we learn, what we can apply?
National committee of Commerce (2015):
Bankruptcy law needs revision in growth direction
to give the second chance. Also it must prepare a
draft law on cooperation between industrial
players and social partners to reform the
bankruptcy law, the establishment, operation and
bankruptcy business.
Therefore, with an unprecedented economic crisis
experienced by the country is entirely justified the
outbreak of an application for the provisions of
this law.
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