Insolvency & Restructuring updates

Cyprus

Legal reform proposals over appointment of receivers
  • Cyprus
  • 08 June 2018

Members of Parliament have proposed legal reforms with the aim of regulating the procedure for the appointment of receivers by debenture holders. The issues under scrutiny are that borrowers have no say during the procedure for the appointment of a receiver, and that issues with the impartiality of the receiver can arise on many occasions. However, the proposal has encountered the resistance of financial institutions.

Imposition of fine on company in liquidation
  • Cyprus
  • 23 March 2018

A district court recently sentenced a company in liquidation that had once been Cyprus's biggest grocery retail company. The sentence concerned the issuance of a cheque with insufficient funds. According to the court, the fact that the company was under liquidation did not negate the fact that a sentence should be proportionate to the offence and act as a deterrent. The case is a useful illustration of how companies in liquidation should be treated when it comes to the imposition of fines.

Disagreement over who is preferential creditor in liquidation of state-owned company
  • Cyprus
  • 02 February 2018

The annual creditors' meeting of former state-owned air carrier Cyprus Airways recently took place. The state stepped in following the company's collapse and paid the majority of employees the money owed to them. Due to this payment, and by virtue of Section 300 of the Companies Law, the state became a preferential creditor, having made a payment that was owed to preferential creditors as a third party on behalf of the company.


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