[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN FINLAND]
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In the end of the proceedings the administrator will prepare a draft of the restructuring programme. The programme is based on the forecast of the debtor’s financial statement. In larger companies the proceedings and programme can be focused on real business turnaround including the changes in company´s strategy. Under Finnish restructuring proceeding it is common that the haircut is between 50 – 70 percent of the unsecured debts. Secured debts cannot be haircutted. Normal length for the payment programme is between 6 – 8 years. Restructuring proceedings ends to the voting procedure concerning the proposed restructuring programme. Creditor can accept or reject the programme in the voting. If the programme reaches the majority in each group of creditors participated in voting, the programme shall be approved by the district court. In Finnish restructuring proceedings it is rare to use debt conversion, so it is very common that the shareholders of the company own the company fully also after the restructuring. It is important for creditors to understand that in the end only less than 30 percent of the companies reach the approved programme. 3. Restructuring programme The district court appoints a supervisor to monitor the implementation of the restructuring programme. The Company is responsible to report to the supervisor about the implementation of the programme and company´s financial statement. When the restructuring programme has been approved, the debtor is responsible to follow the payment programme which has
been set out in the programme. If the debtor cannot follow the payment programme, the creditor has a right to request a lapse of the programme from the district court. After the lapse, the creditor has a right to start the collection of the debts again. It is important for the creditors to understand that only under 10 percent of the companies succeed in implementing the restructuring programme fully. Most of the restructuring proceedings fail in some of the above-mentioned three steps. Bankruptcy proceedings in Finland In Finland the bankruptcy proceedings can be declared if the debtor is unable to fulfill its payments on time and shall be deemed insolvent. Application for bankruptcy can be done debtor by self or the creditor of the company. In Finland the creditor is not responsible to pay the costs of the proceedings if there is no current assets in the bankruptcy estate. The decision to declare a bankruptcy process is made by a district court whose jurisdiction the general administration of the debtor is located in. The court appoints an administrator/trustee for the bankruptcy. Administrators’ role is to control the assets of the debtor and liquidate the assets. In Finland most of debtor's assets is usually sold via internet auction but it is also possible to sell the whole business of debtor. Employees In Finland the employees of the company has a right to have their salaries and other costs related to the employment agreement between the company and employee from Pay security. In bankruptcy the termination period for the employment agreement is 14 days.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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