01.09.2014 – The law firm “Spilios Spiliopoulos and Associates” is acting for the preparation, drafting and concluding a contract with ALPHA BANK for the provision and establishment of a pledge and the assignment of contractual claims, within the framework of Law 2844/2000 (fictitious pledge). According to its explanatory report, this relatively new law aims, on the one hand, to increase the creditworthiness of debtors (businesses or professionals) and, on the other hand, to provide more complete security for creditors.
The former is achieved mainly through the possibility of pledging movable property without transferring possession (in deviation from the provisions of Articles 1211-1213 of the Civil Code on common pledges). The practical benefit of this new institution for the pledgor is that they are not deprived of the items they pledge, but can continue to use them for their business or professional activities, while retaining the power to dispose of the security items and simultaneously replace them with others of similar value (floating security).
The second is achieved mainly through the possibility of publishing the security agreement. According to the explanatory memorandum to the law, the core of this new regulation is the introduction of a system for publicizing security interests in movable property, claims, or other rights by registering them in public registers, such as mortgage registers for security interests in real estate.
The fictitious pledge is established pursuant to Articles 1 and 3 of Law 2844/2000 by written agreement and its publication (in the Pledge Registry and Land Registry books). The transparency thus achieved strengthens public confidence and the security of transactions, while providing stable and fair criteria (based on the time of publication) for resolving the problem of priority among multiple security holders. Article 1(1) of Law 2844/2000 stipulates that this new institution of the “fictitious pledge,” which consists of a pledge without delivery of the movable property, but only with a written agreement between the pledgor and the lender and its publication in accordance with Article 3, applies only to cases where both the lender and the debtor are businesses or professionals and the security is provided for the needs of the latter’s business or profession. A prerequisite for the validity of the fictitious pledge is that the claim for which it is established must be valid. Therefore, the possibility of establishing such a pledge is subject to a double restriction, on the one hand with regard to the persons of the contracting parties and on the other hand with regard to the type of secured claims
