To reduce losses following the COVID-19 crisis, primary Finnish airline company Finnair has suspended many of its loss-making domestic flights to eastern and western Finland. One possible way to save the suspended domestic flight routes would be for the government to provide direct state aid to airlines that wish to operate them. However, such state aid would require EU Commission notification and approval.
The Finnish state (which is Finnair's majority shareholder) has provided a guarantee of up to €600 million to assist Finnair in strengthening its financial position and mitigate the impact of the COVID-19 pandemic. This did not go unnoticed by Finnair's competitors – Ryanair challenged the guarantee given by the Finnish state, alleging that the guarantee constitutes unlawful and discriminatory state aid in accordance with EU state aid rules.
Finnair recently announced that it is cutting 90% of its normal flight capacity due to the COVID-19 outbreak and consequently cancelling the majority of its flights temporarily as of 1 April 2020 until the situation regarding the coronavirus pandemic improves. The cancellation will affect between 1,500 and 2,000 flights from 16 March 2010 until 31 March 2020, with only critical air connections for Finland maintained.
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, such as those concerning the lodgement of claims, dates of creditors' meetings and the bankruptcy and restructuring proceedings case management system.
The Eastern Finland Court of Appeal recently ruled on a bankruptcy estate's liability for a mutual real estate company's maintenance charges. This decision further defines the scope of bankruptcy estates' liabilities and is a logical continuation of Supreme Court precedent in this area. As payments of bankruptcy estates' administrative expenses are privileged compared with claims against debtors, the definition of 'administrative expenses' should be interpreted cautiously.
In January 2015 two Supreme Court precedents indicated that assets subject to floating charges should be valued at their feasible liquidation value; however, under these precedents, the valuation terms were somewhat ambiguous and certain liquidation costs remained undetermined. The court's latest precedent addresses the equal treatment of creditors in both restructuring and bankruptcy proceedings and clearly improves the predictability of floating charges as securities in the former.