Lapse of bankruptcy and public receivership
A bankruptcy may lapse if
- there are not enough funds in the bankruptcy estate to cover the costs of the bankruptcy proceedings and none of the creditors wants to pay them
- the creditors would not get enough funds from the estate.
Before the estate administrator proposes to the court that the bankruptcy should lapse, the administrator notifies the creditors, the Bankruptcy Ombudsman and your company of the matter. The creditors must decide whether they want to pay the bankruptcy costs to continue the normal bankruptcy proceedings. The Bankruptcy Ombudsman must decide whether the bankruptcy proceedings should continue under public receivership.
If the court decides that the bankruptcy should lapse, the bankruptcy proceedings are ended, and your company is closed down. If your company is a limited liability company, the Finnish Patent and Registration Office will remove it from the trade register automatically. If you operate under any other form of business, you must notify the trader register of the matter.
There may be some funds left in a bankruptcy estate that lapses. In such a case, the bailiff will distrain the assets that are not needed to cover the bankruptcy costs and the estate's other debts.
Public receivership
A bankruptcy does not always lapse for lack of funds as it can be continued under public receivership. This may be because more needs to be known about the operations of your company. The main purpose of public receivership is to combat economic crime and the grey economy.
The Bankruptcy Ombudsman files the request for transfer of the bankruptcy to public receivership, and the decision on the matter is made by a court. In public receivership, the bankruptcy proceedings continue under the supervision of the Bankruptcy Ombudsman. The costs are paid from state funds to the extent that the assets of the estate are insufficient.
The Bankruptcy Ombudsman usually appoints the original estate administrator as the public receiver. The public receiver manages the administration and other practical matters of the bankruptcy estate. The Bankruptcy Ombudsman and the public receiver jointly decide how the bankruptcy proceedings will continue under public receivership.
The public receivership process ends when the public receiver submits the final settlement of accounts to the Bankruptcy Ombudsman. In the same connection, your company will also be closed down.
The public receivership process may also end with the return of the bankruptcy proceedings to the creditors.