The Eastern Finland Court of Appeal recently ruled on a bankruptcy estate's liability for a mutual real estate company's maintenance charges.

Facts

The Bankruptcy Act has been amended by a statute which came into force on 1 July 2019. The amendments aim to simplify and accelerate bankruptcy proceedings. This article focuses on amendments that affect the position of creditors located outside Finland.

Lodgement of claims

Background

Introduction

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.

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.