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.
Generally, Finnish insolvency legislation has been stable and proven effective over the past decade. However, owing to technological advancements and recent bankruptcies involving businesses affecting the environment, there is a growing need to fine-tune bankruptcy proceedings and environmental liabilities in bankruptcies. After two years of research, an expert group established by the Ministry of Justice has published a report on these issues.
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. Pursuant to legislation, a bankruptcy estate is, in principle, entitled to choose whether to conduct activity liable to value added tax provided that it does not continue the debtor's business.
The Eastern Finland Appeal Court recently assessed whether a statutory maritime lien over cargo also covers the costs associated with a general average that accrued as a result of confirming that general average and exercising the lien for a general average contribution. In deciding that these kinds of associated costs and expenses are not recoverable and secured by a maritime lien, the court made the exercise of a lien more difficult and less attractive to shipowners.
The main aims of the Transport Code are to create a growth environment for digitalisation and promote transport business by deregulation. Due to the code's broad scope, its preparation has been divided into three stages. Provisions relating to the code's third stage were recently opened for comment by the Ministry of Transport and Communications. The majority of comments received before the June deadline highlighted data protection issues.
The Transport Code (formally the Act on Transport Services) is one of the government's key initiatives. The code's main purpose is to create a growth environment for business digitalisation and promote transport business by deregulation. The code will reform the regulation of all transport modes, so that the regulation itself will not become an obstacle to digitalisation, automation and new innovations.