Vathis & Associates — Corporate Law | Noteworthy News
I. Background
Before the Single-Member Court of First Instance of Piraeus (Voluntary Jurisdiction), our firm successfully represented a co-managing partner of a Private Capital Company (IKE) incorporated and operating in Greece. The case raised critical questions regarding the limits of judicial intervention in the management of a private capital company and the conditions under which a court may appoint an independent interim manager pursuant to Article 69 of the Greek Civil Code (AK), read in conjunction with the provisions of Law 4072/2012.
II. The Legal Framework
Private Capital Companies (IKE) established under Law 4072/2012 offer a flexible corporate structure; however, disagreements between co-managing partners may rapidly lead to a complete paralysis of corporate administration. In such cases, Greek law recognises a limited yet decisive judicial remedy: the appointment of an independent interim manager by the competent court pursuant to Article 69 AK — a provision which, according to settled case law, is interpreted restrictively and applies exclusively under conditions of absolute necessity.
The substantive prerequisites for the application of this provision include: the factual establishment of a constructive absence of management (plasmatiki elleipsi dioikisis), the demonstration of a persistent and structural conflict of interests between the co-managers, and the impossibility of adopting decisions essential for the functioning and continuity of the company.
III. The Dispute
The IKE at the centre of the dispute was active in the art sector and had its registered seat in Piraeus. The two co-managing partners held equal shares and exercised joint management authority. Their relationship had irreparably broken down, giving rise to a persistent deadlock characterised by a complete collapse of cooperation, mutual allegations of mismanagement, and a systematic inability to reach any decision on operational, financial, and tax matters.
What made this case particularly notable is that both partners simultaneously sought judicial relief by filing opposing petitions for revocation on grounds of serious cause: our client sought, as a primary claim, the revocation of the opposing co-manager as statutory manager, while the opposing party filed a cross-petition seeking the revocation of our client. The proceedings therefore featured two mutually contradictory petitions that neutralised each other, creating a procedural deadlock that faithfully mirrored the substantive deadlock within the company itself.
The strategic choice of our firm was to ground our client’s petition alternatively on Article 69 AK — which applies to IKEs — seeking the appointment of an independent interim manager as a balancing solution. Article 69 AK is precisely the instrument capable of playing a decisive equalising role in corporate disputes, as it does not require the attribution of fault to any specific partner: it applies equally to situations of constructive absence of management, that is, when the inability of the co-managers to reach agreement renders corporate governance de facto non-existent. Rather than pursuing a selective — and procedurally uncertain — revocation, our firm elected to target the appointment of an independent third party to assume responsibility for the ordinary and day-to-day management of the company, thereby ensuring operational continuity pending a final resolution of the dispute.
IV. The Decision (No. 6058/2025)
Following a public hearing on 2 October 2025 and deliberation, the Court issued Decision No. 6058/2025, published on 23 December 2025, by which both petitions were resolved as follows:
The cross-petition filed by the opposing party — seeking the selective revocation of our client as statutory manager — was dismissed in its entirety. The Court found that the facts established on the evidence did not constitute a serious unilateral ground for revocation attributable exclusively to our client, and further observed that the selective removal of one co-manager would produce an undue distortion of the company’s internal equilibrium.
Our client’s petition was upheld in part on its alternative basis. The Court found that both co-managers had committed breaches of comparable severity, without it being possible to establish that one was clearly more culpable than the other, and that the resulting deadlock constituted a constructive absence of management within the meaning of Article 69 AK. Accordingly, the Court proceeded to appoint an independent interim manager — a qualified Economist, Certified Accountant and Tax Expert registered on the Court’s list of expert witnesses — for a term of eight (8) months from the date of publication of the decision.
V. The Scope of the Interim Manager’s Authority
The Court defined with precision the content and limits of the interim manager’s mandate. His authority encompasses all acts of ordinary management and legal representation of the company necessary for its smooth functioning, and specifically includes:
- Compliance with tax and accounting obligations and payment of current liabilities towards the State, social security funds, and suppliers;
- Sole representation of the company before all public authorities, tax and social security services, banks, courts, and third parties;
- Filing of income tax returns, VAT returns, and all other fiscal declarations; preparation and submission of balance sheets and maintenance of commercial books;
- Conclusion and execution of contracts relating to the everyday operation of the company;
- Management of corporate email accounts, the company’s website and social media channels, with signatory authority and the right to issue payment orders on bank accounts;
- Pursuit and satisfaction of the company’s legitimate claims against third parties.
Conversely, the interim manager is expressly prohibited from altering the company’s legal form, articles of association, or share capital, from disposing of corporate assets of significant value, or from assuming long-term corporate commitments.
Within the eight-month period of his appointment, the interim manager is further required to convene a general meeting of partners with a specific agenda item: the resolution of the management deadlock, either through the consensual restoration of corporate governance by the appointment of a new manager or managers, or — should no agreement be reached — through a resolution for the dissolution of the company in accordance with the law and the articles of association.
VI. The Significance of the Decision
This decision is of particular interest to legal practice for the following reasons.
First, it illustrates the careful balancing exercise required by Article 69 AK: judicial intervention in the internal affairs of a private capital company is permissible only where the evidence demonstrates a genuine and irreversible management vacuum. The Court correctly declined to use this mechanism as a tool for the selective sanctioning of one partner at the request of the other.
Second, the appointment of an independent professional — an economist and certified accountant with forensic expertise — as interim manager reflects the Court’s recognition that restoring the operational continuity of a commercially active company requires not only legal authority but also substantive financial and tax competence.
Third, the decision confirms that a 50/50 co-management structure, while commercially practical, carries inherent governance risks in the event of a breakdown in the partnership relationship. Careful drafting of the articles of association — incorporating deadlock resolution mechanisms — remains an essential precaution at the stage of incorporation of any IKE.
VII. Conclusion
The successful outcome in this matter underscores the importance of strategic litigation planning in corporate disputes, including the careful formulation of alternative claims and the marshalling of evidence capable of satisfying the stringent requirements of Article 69 AK. Vathis & Associates provides specialised legal guidance at every stage of corporate disputes, from the design of corporate governance frameworks to representation before the Greek courts.
For further information on corporate disputes and IKE management issues, please do not hesitate to contact our office.
