According to the Purchase and Sale of Credit Facilities and Relevant Matters Law of 2015, as amended in 2018 the Licensed Credit Institutions, for instance the Banks, are prohibited by law to proceed to the sale of a credit facility (i.e. a loan) to a credit-acquiring company (among other categories of eligible purchasers) if, at the time of acquisition/purchase of the facility in question the following have occurred:

(a) The total amount of the credit facilities of a debtor, a natural person, exceeds the €1.000.000 or

(b) The total amount of the facilities of a debtor small or medium-sized enterprise (based on the definition provided by a relevant European Commission Recommendation) exceeds the €1.000.000 or

(c) The total amount of the facilities of connected group of enterprises as described above exceeds the €1.000.000.

First Instance Court Judgments have ordered the prohibition and/or the suspension of auctions of assets which fall within the aforementioned categories and which have been sold by Banks to credit-acquiring companies without complying with the legislation as described above. The prohibition and/or suspension of any procedure of auction or forced sale remains in force, in the said court judgments and/or orders until the hearing of the Action.

Our firm has successfully handled this nature of cases and has achieved to successfully oppose the objections of credit-acquiring companies in the light of the applicable law and the relevant case-law.

N.B.: The above-mentioned is a general review of the said legal issue. For further clarification please do not hesitate to contact our office.

Photograph: Markus Spiske