The events in the last few years have had significant and lasting impacts on business in general and restructuring in particular, with the latter referring to the various options available for firms experiencing difficulties. European economies, hit by both the upheavals caused by the health crisis and geopolitical tensions, have also been a
In the European Union, the European Insolvency Regulation (EIR) determines the jurisdiction for a debtor's insolvency proceedings, the law applicable to those proceedings and provides for mandatory recognition of the proceedings in other EU member states.
The COVID-19 pandemic continues to drag on. Finland is currently in a three-week lockdown, and experts predict that we will have to adopt even more stringent measures before enough of the population has been vaccinated.
At the same time, companies that have been struggling with the pandemic for over a year already have to keep looking for ways to improve their liquidity. There is still no certainty over when we will be able to return to normal.
Temporary Respite for Payment Still in Force
As the Novel coronavirus (COVID-19) pandemic continues to spread across the globe, people and businesses are facing unprecedented challenges, both immediate and strategic. Governments in various jurisdictions have announced various measures to try to alleviate the distress caused by the numerous issues that have arisen and continue to arise, particularly around cashflow and employees.
The COVID-19 pandemic hit Finland’s economy hard last spring. The restrictions and recommendations issued to stem the pandemic led to an unexpected drop in turnover and cashflow in many sectors.
Legal background
Council Regulation (EC) No 1346/2000 concerns insolvency proceedings with debtors which operate cross-border in the EU.
Broadly, the law applicable to insolvency proceedings is the law of the member state in which the insolvency proceedings are opened. This includes rules relating to the voidness, voidability or unenforceability of legal acts which are detrimental to all creditors; article 4.
Background
The tax issues of a bankruptcy estate and the creditors differ depending on whether the bankruptcy estate continues the previous business of the debtor company. The effects of a debtor's bankruptcy on the creditor's taxation may be particularly significant where the creditor is a lessor to the debtor.
There are separate processes and legislations concerning bankruptcy (the Bankruptcy Act 120/2004) and restructuring (the Restructuring of Enterprises Act 47/1993) in Finland. There is also a separate law stipulating private individuals' insolvency (the Act on the Adjustment of the Debts of a Private Individual 57/1993).