Stages of bankruptcy proceedings

If the district court decides to launch bankruptcy proceedings, it

• sends information on the initiation of proceedings to the Trade Register, the Bankruptcy and Corporate restructuring Register and the Credit Register
• appoints an estate administrator.

When the creditors file for the bankruptcy of a company

• The district court notifies the company of the bankruptcy petition
• The company can issue a written statement on the petition before the district court processes the petition

The estate administrator

• takes over the assets belonging to the estate, the company’s accounting materials and other documents, and sees to the management and preservation of the assets
• takes the necessary steps to recover the debtor’s receivables and safeguard the rights of the estate and to terminate contracts whose validity is not necessary for the administration of the estate
• carries out the estate administrator’s duties concerning the wage guarantee
• investigates the extent of the estate and the possibilities of reversing legal proceedings and returning assets to the estate
• starts the realisation of the company’s assets.

The estate administrator prepares, usually prepares within 2 months,

• an estate inventory of the company’s assets and debts and an estimate of the value of the company’s assets when converted to cash.
• a debtor description of the period prior to the bankruptcy.

The company must provide the estate administrator the necessary information and confirm the correctness of the estate inventory.

The estate administrator arranges oversight for the debt provable in bankruptcy and determines their oversight date.

If there are not enough assets in the bankruptcy estate, the bankruptcy lapses or is transferred to public receivership.

If the bankruptcy estate has enough assets, the estate administrator prepares a proposal for a distribution list.

The creditors inform the estate administrator of their claims. They are usually given 1-2 months to do so.

The estate administrator submits the proposal to your company and the creditors who have requested it.

Contesting the proposal is possible:

• Company that has filed for bankruptcy: If the amount indicated by one of the creditors is not correct in the company’s opinion.
• Creditor: For example, if another creditor’s claim is incorrectly prioritised over its own.

The contestation must be submitted in writing to the estate administrator within one month of the completion of the proposal for a distribution list.

The estate administrator

• makes the necessary adjustments to the distribution list proposal based on the contestations and edits the actual distribution list
• submits the distribution list to the district court.

The court examines the distribution list and contestations and then confirms the list.

Once the assets of the company have been realised, the estate administrator pays all the costs arising from the bankruptcy proceedings from the bankruptcy estate.

The estate administrator distributes the remaining funds to the creditors according to the distribution list.

The estate administrator makes the final transfer. It contains an account of the administration of the bankruptcy estate and the assets distributed to creditors.

The estate administrator notifies the Legal Register Centre of the approval of the final transfer.

The bankruptcy is finished.

There is no need to submit a separate notification of closing down the company, as the Legal Register Centre notifies the closing of the bankruptcy proceedings and the termination of the company to various registers.