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Public Receivership
Marina Vatanen, Senior Bankruptcy Lawyer
Office of the Bankruptcy Ombudsman
Finland
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Contents
1. Criteria
2. Procedure
3. Public receiver
4. Conclusion of public receivership
5. Public receiverships so far
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Public receivership =
• A method for scrutinising the pre-bankruptcy activities of the debtor in assetless bankruptcies
• An alternative to lapse (total discontinuation) of bankruptcy
• The proceedings are financed by the state if the funds of the bankruptcy estate are insufficient
• Introduced in 2004 by Chapter 11 of the Bankruptcy Act
• Combating insolvency related financial crime a central objective
Criteria
Can be initiated provided that the court considers it to be justified either: •(i) due to the insufficient means of the bankruptcy estate; •(ii) due to the need for the debtor or the estate to be scrutinised or •(iii) due to other particular reasons
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Procedure
• Request by the Bankruptcy Ombudsman required, Court decides
• The Court order on the continuation of a bankruptcy under public receivership is not open to appeal
• The appointment of the administrator and the authority of the creditors cease
• The Bankruptcy Ombudsman appoints a public receiver
Public receiver
• The public receiver has the same duties as an administrator, and must meet the same qualifications
• Usually administrators and public receivers are attorneys• Usually the administrator continues as public receiver• The Bankruptcy Ombudsman may cancel the
appointment of a public receiver• The Bankruptcy Ombudsman decides on the
compensation
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Conclusion of the public receivership
•The public receiver shall prepare the final settlement of accounts of the bankruptcy estate, as provided in chapter 19 of the Act concerning administrators.•The final settlement of accounts are checked and accepted by the Bankruptcy Ombudsman.
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Public receiverships so far (1/3)
• The first steps towards public receivership are usually taken by the estate administrator or the Bankruptcy Ombudsman
• In every bankruptcy the Ombudsman has a written statement by the administrator (debtor description) about the relevant facts
Public receiverships so far (2/3)
•In nearly 80 % of cases the reason for public receivership is suspected criminal offences (mainly offences by a debtor)•Almost as often – in about 75 % - the public receiver investigates whether there are grounds for asset recovery•In public receivership there is no tension between investigations aimed at asset recovery and investigations aimed at discovering wrongdoing
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Public receiverships so far (3/3)
• More than 650 court orders on a transfer to public receivership have been given
• During the last few years 80-90 per year• About 450 open -> over 11 % of all bankruptcies are
under public receiversihp• State budget for 2014: 400 000 euros
• Figures 2013 Costs (gross) 418 000 €
Recovered costs 65 000 €
Distributed to creditors 786 000 €
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Thank you…
Marina Vatanen
Senior Bankruptcy Lawyer
Office of the Bankruptcy Ombudsman
Helsinki, Finland
www.konkurssiasiames.fi
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