FINLAND Law and Practice Contributed by: Timo Lehtimäki, Niklas Thibblin, Essi Hietaoja and Oona Honkamaa, Waselius
Revocation of Security In addition to the general grounds for revocation, the granting of security or collateral within a criti - cal period of three months (two years between related parties) may be revoked where the secu - rity 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 Finn - ish law may impact on the validity and enforce - ability of contractual arrangements. 7.7 Set-Off Rights Set-off in insolvency is recognised in Finland. A creditor 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 requirement that the receivables in question have fallen due, which would be applicable outside insolvency. The bankruptcy trustee or administrator (as applica - ble) 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 proce - dures for out-of-court restructuring. Instead, the parties may choose between a voluntary agree - ment between the debtor company, its creditors and shareholders (as applicable), early or regular restructuring, or a combination of voluntary and statutory restructuring. Voluntary restructuring and debtor-initiated early restructuring are typically available when a com - pany seeks to address its financial difficulties
insolvency process that can last several years, with the final recoveries being paid only at the end of the proceedings. 7.6 Transactions Voidable Upon Insolvency A transaction, series of transactions, arrange - ment or any other act relating to the assets of the debtor can be challenged pursuant to the Act on Revocation of Transactions in Insol - vency (the “Revocation Act”), if made during a critical period preceding insolvency or foreclo - sure proceedings, provided that the conditions described below are met. The critical period is calculated backwards from the filing for insol - vency proceedings or enforcement of a claim by foreclosure. General Grounds for Revocation Transactions may be revoked pursuant to the Revocation Act where the arrangement can be deemed as improper or inappropriate from the point of view of the other creditors of the debtor, and where the counterparty of the debtor knew or ought to have known of the debtor being, or by virtue of the transaction becoming, unable to pay its debts when due. The 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 par - ties) 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 circumstances.
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