A mid-sized technology services company operating across Finland and two other Nordic markets entered insolvency proceedings after a prolonged revenue contraction. Its creditor pool included a domestic bank, two foreign trade creditors, and a group of unsecured suppliers. Each creditor held a different priority position under Finnish insolvency law. Without a coordinated restructuring plan, the company faced liquidation – and its creditors faced recovering far less than the business's going-concern value would allow.
Corporate restructuring under Finnish insolvency legislation offers distressed companies a court-supervised alternative to liquidation. The debtor, assisted by a court-appointed pesänhoitaja (administrator), prepares a restructuring plan that must satisfy a defined creditor approval threshold. The process typically spans six to eighteen months from the filing of the application to the confirmation of the plan.
This case study outlines the strategy chosen, the key milestones reached, the complications that arose, and the lessons that apply to any cross-border matter involving multi-creditor claims in Finland.
Client profile and the challenge at hand
The client was a holding entity incorporated in Finland, with operating subsidiaries in Sweden and Estonia. The Finnish parent carried the bulk of the group's secured and unsecured debt. The holding structure complicated the proceedings immediately: assets and intercompany receivables were distributed across three jurisdictions, each with distinct insolvency rules.
The most pressing challenge was the proof of debt process. Foreign creditors were unfamiliar with Finnish procedural requirements. Two of them submitted claims after the administrator's deadline. Under Finnish insolvency legislation, late claims do not automatically extinguish the creditor's right, but they affect the creditor's participation in the velkojien kokous (creditors' meeting) and can reduce their influence over plan approval.
The domestic bank held a floating charge over the company's receivables. It had the right to enforce independently of the restructuring proceedings, subject to certain stay conditions. Managing that secured position – while preserving the company's cash flow – required early engagement with the bank's legal team and a clear financing proposal within the restructuring plan.
For businesses in comparable situations, our insolvency and restructuring services in Finland provide end-to-end support from the initial application through to plan confirmation.
Strategy, milestones, and complications
The core strategic decision was to pursue yrityssaneeraus (corporate restructuring under Finnish law) rather than liquidation. The rationale was straightforward. The business retained a viable client base and recurring contracts. Liquidation would have destroyed that value. A restructuring plan, if confirmed, would allow the company to continue operating while repaying creditors over a structured timeline.
The first milestone was filing the application and securing the court's appointment of an administrator. That appointment triggers an automatic stay on enforcement actions, giving the debtor breathing room to prepare the plan. The stay was in place within three weeks of filing.
The administrator then worked with the legal team to classify creditors by priority and to open the proof of debt submission window. This stage revealed the first complication: one foreign trade creditor disputed the valuation of its claim. The creditor argued that intercompany pricing adjustments had understated the amount owed. Resolving this required a separate expert assessment and negotiation outside the main proceedings.
The second complication arose at the creditors' meeting. Finnish insolvency legislation requires the plan to receive support from a defined majority of creditors voting by both number and value. The unsecured suppliers, though individually small, collectively held enough votes to block approval if they acted in concert. Achieving consensus required individual outreach to each supplier and a revised payment schedule that prioritised smaller creditors in the early repayment tranches.
The restructuring plan was ultimately confirmed by the court. The administrator's role shifted from oversight to monitoring compliance with the payment schedule. The company retained its operating licences and existing client contracts throughout the process.
Where related disputes escalated between creditors during the proceedings, our team drew on experience in corporate dispute resolution in Finland to manage divergent creditor interests without derailing the timeline.
To explore a legal strategy tailored to your restructuring situation in Finland, contact us at info@ferrazwhitmore.com.
Three transferable lessons for cross-border restructuring matters
Lesson 1: File proof of debt early – and verify foreign creditors have done the same. Late submissions may not bar recovery, but they reduce a creditor's standing at the creditors' meeting. In cross-border matters, foreign creditors frequently miss deadlines due to unfamiliarity with local procedural rules. Counsel coordinating the matter should confirm receipt of each submission, not assume it has been filed correctly.
Lesson 2: Secured creditors require a dedicated engagement track. A floating charge holder in Finland has enforcement rights that operate independently of the restructuring stay in certain circumstances. Treating secured and unsecured creditors under a single negotiation strategy is a common mistake. Secured positions must be addressed directly and early, with a financing proposal that gives the charge holder a credible alternative to independent enforcement.
Lesson 3: Small creditor cohorts can determine the outcome of a vote. Restructuring plans in Finland can fail because of unsecured supplier groups who, individually minor, collectively hold blocking power. A plan that concentrates early repayment benefit on larger creditors often loses this cohort. Structuring the repayment schedule to give smaller creditors a meaningful early recovery is not only equitable – it is strategically necessary for plan confirmation.
For companies facing multi-creditor insolvency proceedings in Finland, these three principles apply regardless of sector or holding structure. A related matter from a different jurisdiction is examined in our case study on corporate restructuring in Portugal, where comparable creditor coordination challenges arose under a civil law system.
To discuss how these lessons apply to your matter in Finland, reach out to info@ferrazwhitmore.com.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our insolvency and restructuring practice covers corporate restructuring, multi-creditor claim management, and cross-border insolvency proceedings across both civil law and common law systems. We work with international investors, holding companies, and in-house legal teams who need results-oriented counsel when distressed situations arise across multiple legal systems. The firm's restructuring team includes practitioners with experience before Nordic courts and in proceedings governed by EU insolvency regulation. Engaging a lawyer in Finland with cross-border insolvency experience is critical when creditors span multiple jurisdictions – as this matter illustrates. As an international law firm in Finland and across Europe, Ferraz & Whitmore helps clients build effective strategies before restructuring windows close. To discuss your situation, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.