FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
critical period is five years preceding the insolvency/ foreclosure filing. However, no time limit applies in dealings between related parties. Revocation of Payments and Set-Off In addition to the general grounds for revocation, the payment of a debt within a critical period of three months (two years between related parties) may be revoked where payment was made with unusual means or prematurely, or where the payment was large in relation to the assets of the debtor, unless such payment is considered ordinary in the circum - stances. Revocation of Security In addition to the general grounds for revocation, the granting of security or collateral within a critical period of three months (two years between related parties) may be revoked where the security was not agreed upon when the underlying debt arose, or where the perfection measures were not taken without undue delay. In addition to the above, other specific grounds for revocation exist – eg, regarding gifts. Further, certain general, fundamental principles of Finnish law may impact on the validity and enforceability of contractual arrangements. 7.7 Set-Off Rights Set-off in insolvency is recognised in Finland. A credi - tor who wishes to use its claim for set-off against a debt owed to the debtor must give a notice of the set- off to the bankruptcy trustee or administrator. Set-off in insolvency must meet the general criteria for set-off under Finnish law, with the exception of the require - ment that the receivables in question have fallen due, which would be applicable outside insolvency. The bankruptcy trustee or administrator (as applicable) examines the grounds for the set-off, and may dispute the intended set-off if they deem that the creditor has no right to such set-off. 7.8 Out-of-Court v In-Court Enforcement Finnish law does not provide for formal procedures for out-of-court restructuring. Instead, the parties may choose between a voluntary agreement between the debtor company, its creditors and shareholders (as
applicable), early or regular restructuring, or a combi - nation of voluntary and statutory restructuring. Voluntary restructuring and debtor-initiated early restructuring are typically available when a company seeks to address its financial difficulties at an early stage, before becoming insolvent. Since the com - mencement of formal restructuring proceedings usu - ally triggers a moratorium and involves an administra - tor, creditors generally have more room to manoeuvre outside formal proceedings. From a structuring perspective, having the group structure (and suitable enforcement point) go through a jurisdiction with tried and tested out-of-court restruc - turing processes should be considered. 7.9 Dissenting Lenders and Non-Consensual Restructurings Bankruptcy Proceedings In bankruptcy proceedings, the creditors exercise their powers at the meetings of creditors, with the bank - ruptcy trustee acting as chairperson. In large bank - ruptcies, the creditors appoint a creditors’ committee to supervise and assist the trustee. This provides a smoother process since the bankruptcy trustee is in control of the dissenting lenders. The trustee must call a meeting of creditors whenever necessary to address questions regarding the man - agement of the bankruptcy estate, and a final meeting at the conclusion of the bankruptcy proceedings. Decisions at the meetings of creditors are made as majority decisions – ie, the opinion representing more than 50% of the votes of the creditors participating in the vote will prevail. The number of votes that each creditor holds is proportional to the size of the credi - tor’s claim – ie, one vote per euro (excluding subordi - nated creditors, if the expected liquidation proceeds are clearly insufficient to satisfy such creditors). A con - flict of interest may prevent a creditor from participat -
ing in a particular decision. Company Restructuring
In company restructuring, the administrator has an obligation to negotiate with (inter alia) the known cred - itors when preparing a proposal for the restructuring
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