FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
legal mergers in particular can be used to eliminate or mitigate the effects of financial assistance limita - tions, though sponsors normally oppose such merg - ers unless there are other, commercial drivers for them beyond improving the position of the lenders. 5.5 Other Restrictions Hardening Periods A transaction, series of transactions, arrangement or any other act relating to the assets of the debtor can be challenged pursuant to the Act on Revocation of Transactions in Insolvency (the “Revocation Act”), if made during a critical period preceding insolvency or foreclosure proceedings, provided that the condi - tions described below are met. The critical period is calculated backwards from the filing for insolvency proceedings or enforcement of a claim by foreclosure, and depends on the type of transaction. These are discussed in more detail in 7.6 Transactions Voidable Retention of title (ROT) is recognised under Finn - ish law and is considered valid under the following requirements: • the ROT has to be clearly agreed and specified between the parties prior to the buyer getting the object into its possession; • the object has to be identified and must be sepa - rable from other assets of the buyer (eg, by name plates); Upon Insolvency. Retention of Title • the ROT can only cover the purchase price and other costs incurred to the seller in connection with the sale of the object; and • the buyer must not be entitled to resell or consume the object, attach the object to another, or other - wise dispose of the object like an owner. There is no requirement to register ROT interest in order for it to be enforceable, and there is no such register in Finland. Extended ROT is not recognised under Finnish law. Anti-Assignment Under Finnish law, receivables are generally freely transferrable without any prior consent from the debt -
or. However, where the underlying contract includes an anti-assignment clause/restriction on transfer, assignment or pledge, such restriction would gener - ally be enforceable against the assignor by the debtor, and the sale or assignment of such receivable would generally not be effective to vest the contractual rights in the assignee. There are, however, some exceptions to this. 5.6 Release of Typical Forms of Security Generally, security is released by unwinding the per - fection measures taken when the security was grant - ed. For example: • registered security is deregistered; • possession of floating charge promissory notes and share certificates is transferred back to the pledgor; and • relevant third parties are notified of the release. 5.7 Rules Governing the Priority of Competing Security Interests and/or Claims Subordination requires an express consent/agree - ment from the creditor being subordinated to other creditors. Contractual subordination – such as LMA template-based intercreditor agreements – are com - monly used. Structural subordination is also used, and certain types of security have a registration-based priority system – in particular, floating charges and real estate mortgages, which can be used to create a structural type of priority order between secured creditors. 5.8 Priming Liens and/or Claims There are no material statutory security interests or priming liens under Finnish law. For example, tax, employee and pension claims do not enjoy any super- priority but instead rank pari passu with normal, unse - cured debt. 5.9 Cash Pooling and Hedging/Cash Management Obligations Cash pooling is relatively common in Finland. Cash pooling accounts and intra-group receivables arising from cash pool arrangements are often excluded from the security package in private credit transactions.
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