Introduction

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.

Introduction

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).

Introduction

The value and operation of floating charges as securities for creditors in restructurings have been the subject of several Supreme Court rulings. However, the question remains as to the value that the receivable of a floating charge creditor must have in order to be considered a secured debt in a restructuring and therefore spared from the restructuring measures that apply to unsecured debts – in particular, the cut on debt capital.

Due to the economic downturn there has been a rapid growth in debt claims and bankruptcy cases in the Finnish courts. Compared to 2008, almost 40% more bankruptcy proceedings and twice as many debt claims have been started this year.

Retention of title clauses are clauses by which the title to property to be sold is retained by the seller until the purchase price has been paid in full. This is an exception to the general rule provided in the Finnish Sale of Goods Act, according to which the title to property is transferred to the buyer at the same time as possession.

Finland implemented the EU resolution and recovery regime for credit institutions and investment firms by the deadline at the turn of the year. The Finnish regulations apply to all local banks and intermediaries until 1 January 2016 when the most significant Finnish financial institutions will become part of the EU’s Single Resolution Mechanism (SRM).

Introduction

Under Finnish law, retention of title can be based on either a separate condition in a sales agreement or a specific agreement referred to in the Hire-Purchase Act.

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