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Duty of bankruptcy administrator to report offences

Duty of bankruptcy administrator to report offences

01.11.2013

A recent amendment to the Bankruptcy Act regulates the duty of the bankruptcy administrator to report offences committed by the bankruptcy debtor. Pursuant to Chapter 14, Section 5 (4), if there is a reason to suspect that the bankruptcy debtor has committed an offence against the creditors, an accounting offence or another business offence, and if such an offence may have more than a minor effect on the claims in bankruptcy or the scrutiny of a bankruptcy estate, the bankruptcy administrator must report the suspected offence to the police if deemed necessary. When filing a report on a debtor’s suspected offence, the administrator must assess the effect that the suspected offence has on claims in bankruptcy and on the scrutiny of the bankruptcy estate. The provision sets out an active and independent duty to the bankruptcy administrator to react to if there is a reason to suspect an offence by the debtor, and the administrator is not bound to creditors’ statements. Typical offences committed against creditors include dishonesty by a debtor, fraud by a debtor, favouring a creditor, accounting offence, money laundering and offences under the Companies Act.

Partner, attorney-at-law Juho Lenni Taattola and associate Lasse Luoma at Hammarström Puhakka Partners, Attorneys Ltd, have written an update on this matter. The update titled “Duty of bankruptcy administrator to report offences” has been published in the International Law Office’s newsletter.