FOR TRANSLATORS 1 3 2017 some minor stylistic

FOR TRANSLATORS 1. 3. 2017 (some minor stylistic changes may still be done) The Bankruptcy Ombudsman in Finland – Both Supervision and Guidance Insolvency Administration’s 15 th Anniversary Conference 9 th – 10 th March 2017 Riga, Latvia 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 1

1. Statistics (1/2) Bankruptcies 2011– 2016 Applications Commenced proceedings Reversal of bankruptcy Lapse of bankruptcy Final settlement of accounts Pending 9. 3. 2017 2011 2012 2013 2014 2015 2016 2 944 2 107 2 956 2 094 3 131 2 245 2 954 2 181 2 574 2 408 1 933 1 812 - 6, 30% 1 200 469 82 1 221 587 75 1 396 685 56 50 1 413 1 163 662 669 3 720 3 678 3 415 3 256 1 125 460 The Bankruptcy Ombudsman Helena Kontkanen, Finland 2

1. Statistics (1/2) Restructuring of Enterprises 2011– 2016 2011 2012 Applications Commenced proceedings 502 353 515 326 571 382 Approval of restructuring plan Termination of proceedings 220 183 159 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 2013 2014 2015 2016 511 343 494 328 440 295 222 147 185 153 183 128 3

2. The Bankruptcy Ombudsman in Finland • Founded in 1995 (Act on the Supervision of the Administration of Bankrupt Estates 109/1995) • Supervises bankruptcy and restructuring procedures • An independent authority • Affiliated with the Ministry of Justice • Staff (10): – Bankruptcy Ombudsman, Head of Office, Senior Bankruptcy Lawyers (6), Administrative staff (2) • Funded by the state: no fees • www. konkurssiasiamies. fi 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 4

3. Reasons for introducing the Bankruptcy Ombudsman in the 1990 s • Social and economic significance of bankruptcies • No formal supervision by authorities • Creditors’ control and supervision by the Finnish Bar Association was regarded as insufficient • Increased discussion regarding misuse of estates’ assets • Decreased activity by public creditors resulting from abolition of creditors’ priorities 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 5

4. Duties of the Bankruptcy Ombudsman (1/2) 1. Developing good practice in administering bankruptcy estates by giving advice and issuing guidelines 2. Supervision of the administering of bankruptcy estates 3. Auditing the accounts and activities of the debtor 4. Undertaking the necessary measures as regards negligence and abuse that have come to light cont… 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 6

4. Duties of the Bankruptcy Ombudsman (2/2) 5. Responsible for Public Receivership which is an alternative to lapse (total discontinuation) of assetless bankruptcies 6. Monitoring proceedings related to restructuring (to the extent necessary) 7. Providing expert opinions to court on issues regarding bankruptcy and restructuring 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 7

5. The Role of the Bankurptcy Ombudsman (1/2) • Core principles: Independent Impartial Influential improvement • Main focus: insolvency practitioners (IPs) who have duty to co-operate • Day-to-day contact with the parties of the proceedings - Administrators - Creditors, Debtors - Courts cont… 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 8

5. The Role of the Bankruptcy Ombudsman (2/2) • Advisory Board for Bankruptcy Affairs – Recommendations • Cooperation – Ministry of Justice / Employment and Economy / Environment – Different authorities: Tax authorities, Prosecutors, Police, Enforcement – Finnish Bar Association and Disciplinary Board – The Federation of Finnish Enterprises, Turnaround Bodies / agencies • Statements / legislative initiatives 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 9

6. Examples of the powers of the Bankruptcy Ombudsman • Right to information – Inventory lists, minutes from meetings, annual reports; including confidential information • Right to participate in creditors’ meetings and take follow up action (but cannot substitute decisions, only the court can do this) • The Ombudsman can apply for a court order that: – Imposes a fine on an IP who has neglected duties; – Dismisses an IP if he or she has neglected his or her duties or for other weighty reasons; – Reduces the IP's fee because of essential negligence of duties or if the fee is clearly above a reasonable level. 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 10

7. The Advisory Board for Bankruptcy Affairs • An advisory body that assists the Bankruptcy Ombudsman by drafting guidelines on the best practice in administering bankrupt estates o 18 detailed recommendations so far o Chairman, vice chairman and seven other members, who must be proficient in bankruptcy affairs • Members represent the Ministry of Justice, courts, advocates, important public and private creditors and enterprices • The Bankruptcy Ombudsman participates in the meetings, and the guidelines are drafted in the Ombudsman’s office 9. 3. 2017 The Bankruptcy Ombudsman Helena Kontkanen, Finland 11

8. Budget 2017 Office of the Bankruptcy Ombudsman 9. 3. 2017 Wages Other costs (rent etc. ) Special audits Total costs € 2017 € 830 000 184 000 830 000 1 844 000 Remuneration on costs of special audits State funding -130 000 1 714 000 Public receivership, estimated amount Kosti Data System State funding TOTAL € **VAT not included 600 000 100 000 2 414 000 ** The Bankruptcy Ombudsman Helena Kontkanen, Finland 12