Role of creditors in bankruptcy proceedings

Creditors with uncontested claims against your company have the right to file a petition for the bankruptcy of your company. The claims may be based on things such as a legally valid judgment or a commitment made by your company.

Creditors also have the right to present their opinion to the court on the choice of estate administrator.

In bankruptcy, the highest decision-making power in your company is transferred from you to the creditors. In creditors’ meetings, creditors have the right to decide on all the affairs of your company that, under the Bankruptcy Act, are not the responsibility of the estate administrator.

Creditors have the right to receive information on matters concerning the bankruptcy estate. Instead, the estate administrator may not disclose some things to you as the debtor’s representative if there is a justified reason for doing so. Still, they must provide the information to you as soon as there is no longer any obstacle to doing so.

In addition, creditors have the right to receive their share of the assets of the bankruptcy estate in accordance with the distribution list drawn up by the estate administrator and confirmed by the court. If a creditor finds that the distribution has not been fair, the creditor has the right to reproach the decision of the creditors’ meeting in a case concerning the approval of the final transfer.

In creditors’ meetings, creditors decide on matters such as the management, use and sale of the assets of the bankruptcy estate. In the meetings, the creditors also make the decision to approve the measures of the estate administrator and carrying out a potential special inspection. They also decide on the estate administrator’s fee.

As a representative of your bankrupt company, you have the right to participate in the creditors’ meetings and express your opinion on the matters under consideration. However, you do not have the right to vote in the meetings. You will usually receive the meeting invitation and information on the meeting agenda from the estate administrator.

The first creditors’ meeting must be held within two months of the completion of the estate inventory and no later than six months after the start of bankruptcy. Otherwise, meetings are held as necessary. However, you do not have the right to demand that a meeting to be held.

The estate administrator can also ask the creditors to make their views known for decision-making in writing or by electronic message or by any other appropriate means when addressing matters that would otherwise require a creditors’ meeting. The estate administrator must ensure that you have an opportunity to express your opinion on the matter under consideration.

Creditors can choose a creditors’ committee from among themselves for the bankruptcy estate, although this is rare. The committee assists and oversees the estate administrator. It also performs the tasks assigned to it by the creditors’ meeting.

With a creditors’ committee, cooperation between the creditors and the estate administrator is closer than if contact is limited to creditors’ meetings alone.

A creditors’ committee must have at least three members. They must represent the major creditor groups. The committee must elect a chairperson from among its members.

The creditors’ committee does not have independent decision-making power. However, the creditors may authorise the committee to approve certain decisions of the estate administrator. The committee makes decisions by a simple majority, meaning that the position with the highest number of votes wins.

The creditors’ committee is convened by the estate administrator or the chairperson of the creditors’ committee.

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