We would like to ensure that you are still receiving content that you find useful – please confirm that you would like to continue to receive ILO newsletters.
29 June 2007
The Supreme Court has recently ruled that a creditor in bankruptcy is entitled to post-distribution payments even where the limitation period has expired. According to the court, the limitation period under the Swedish Limitation Act (10 years) does not apply in this case.
At the time of the discharge of the bankruptcy in 1993 (which involved a grocery store), an unknown asset of the bankruptcy estate - a share dividend of approximately Skr575,000 - was already registered at the county council in the name of the bankrupted company. When the administrator was informed of the existence of this asset in 2004, he re-opened the bankruptcy proceedings and started post-distribution proceedings. The administrator then objected to certain claims referring to the fact that the limitation period had expired.
The creditors took legal action against the bankruptcy estate; they were successful in the district court, but lost the case in the Court of Appeal. However, the Supreme Court agreed with the district court. It stated that if it appears that certain funds are available after the distribution proposal has been prepared (eg, if a previously unknown asset is discovered), the administrator must distribute the funds within the scope of the post-distribution proceedings. The court further stated that the aim of post-distribution proceedings is to adjust the original distribution proposal and that there is no legal time limit for commencing such proceedings. Therefore, a creditor may participate in post-distribution proceedings if its claim could have been submitted during the original bankruptcy proceedings. The issue of whether the limitation period for the claim had expired at the time of the post-distribution payments was thus irrelevant.
For further information on this topic please contact Margareta Andersson or Jörgen Wistrand at Wistrand Advokatbyrå by telephone (+46 31 771 21 00) or by fax (+46 31 771 21 50) or by email (firstname.lastname@example.org or email@example.com).
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
ILO is a premium online legal update service for major companies and law firms worldwide. In-house corporate counsel and other users of legal services, as well as law firm partners, qualify for a free subscription.