[BANKRUPTCY, INSOLVENCY & REHABILITATION PROCEEDINGS IN FINLAND]
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throughout Finland, administrators of bankruptcy estates are supervised by the Bankruptcy Ombudsman, and as they are usually attorneys, also by the Finnish Bar Association. Liquidation the process. In In bankruptcy proceedings, one of the administrator’s main duties is to realize and liquidate the assets belonging to the bankruptcy estate. A common method of selling assets nowadays is through online auctions, but in larger bankruptcy estates, it is also common to carry out a sale of business involving the entire business of debtor or part of it. If a buyer purchases a business from a bankruptcy estate, the buyer is not liable for the debtor’s obligations that arose before the bankruptcy. Employees Employments are usually terminated by the administrator at the beginning of the proceedings. The termination period for employment agreements under bankruptcy proceedings is 14 days. Employees of the bankrupt company have the right to their unpaid salaries and other employment-related costs through Pay Security. The process for Pay Security is usually handled by the bankruptcy estate in cooperation with the authorities. Creditors meetings In the bankruptcy estate, decisions concerning the matters of proceedings, such as the liquidation of assets, are usually made by creditors in creditors meetings. Creditors’ meetings are convened and facilitated by the administrator, providing creditors with the opportunity to decide on significant matters related to the bankruptcy estate. While attendance at these meetings is not mandatory, it is conventionally advisable to participate to safeguard creditor interests. These meetings are primarily conducted in Finnish, emphasizing the
importance of early contact with the administrator or local attorneys for guidance on navigating the meeting. In addition to the creditors’ meetings, it is also common for decisions to be made in a more informal procedure where the administrator hears the largest creditors of the estate in written form via email or mail. Lodgement of claims Creditors must file lodgement letters of their claims with the administrator by the specified deadline, which is called the lodgement date. The lodgement date is announced to the creditors by the administrator. These claims are then included in the disbursement list, which is subject to approval by the district court. Creditors whose claims are listed in the disbursement list, and which are then approved by the court, receive disbursements from the bankruptcy estate’s assets. Failing to lodge a claim by the lodgement date leads to an obligation to pay a lodgement fee or even the loss of the whole claim. Duration of bankruptcy proceedings Bankruptcy proceedings in Finland typically last from one and a half year to three years, with various factors such as the complexity of asset liquidation and ongoing court cases potentially extending the duration. Disbursements are usually paid to the creditors at the end of the proceedings, which is important to take into account.
ILN Restructuring & Insolvency Group – Bankruptcy, Insolvency & Rehabilitation Series
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