The Developing of Proper Practice of Administering A Bankrupt's Estate. According to the Act, the main duty of the Ombudsman is to develop the proper practice of administering the bankrupts' estates. To help him in this duty the Ombudsman has an Advisory Board with a wide base, the Advisory Board for Bankruptcy Affairs. The Board has taken to its primary task to prepare written guidance concerning the proper practice of administering bankrupts' estates.
The Supervision Over the Administering of Bankrupts' Estates. The duty of the Ombudsman is to supervise that bankrupts' estates are administered according to the law and in accordande with the proper practice of administering the estates. The Ombudsman has to take the necessary action if he finds that there have been some sort of negligence or abuse or other matters that demand correction. The object of this supervision is primarily the practitioner in charge of the bankrupt's estate who takes care of the regular business of the estate. The Act gives orders as well to the temporary administrator in the beginning of the bankruptcy proceedings as to the trustee who continues his work all the way to the end of the proceedings.
The Ombudsman has also the right to have supervision over the decision making of the creditors and therefore the right to take action if he finds that the meeting of the creditors has made a decision against the law or the proper practice of administering the estate.
Issues concerning purely practical matters do not belong to the Ombudsman. However, the line between legal and practical matters is not always completely unambiguous. An action poorly adapted to its purpose may be a breach of duty against the general obligation to act carefully (see section 70 of the Bankruptcy Act) and also against the proper practice of administering the estate.
For instance, it is not the Ombudsman's duty to offer an opinion about the question to whom, when or at what price to sell property from the estate. However, the Ombudsman may have to take a stand afterwards about the question if the property has been sold in the estate's best advantage (see section 71,2 of the Bankruptcy Act).
Auditing the Accounts and Activities of the Debtor. For the present the Finnish law about bankruptcies does not include explicit provisions about the question to which extent the administration of the estate has the duty to look into the affairs of the debtor in order to find, for example, grounds for indictment, disqualification or recovery to the estate. In many cases the activities of the debtor will not be investigated because the estate has not the sufficient assets for the investigation. This is the case especially when the bankruptcy proceedings are nullified because of insufficient assets. When the estate has no means or will to investigate the fitness of the pre-bankruptcy activities of the debtor despite the fact that an investigation would appear to be well-grounded, the Ombudsman can take action to audit the accounts and activities of the debtor.
The Giving of Advice and Instructions. The Ombudsman has also the general duty to give advice and instructions relating to the administering of bankrupts' estates. Courts, administrators or trustees of bankrupts' estates, creditors, debtors, officials and other parties involved in bankruptcies can turn to the Ombudsman in order to get his stand on an issue concerning bankruptcy proceedings or administering bankrupt's estate.
The Ombudsman has also the duty to supervise the reorganization proceedings of companies but only "to a necessary extent".
Last updated 26.08.2004
Bankruptcy Ombudsman, Bulevardi 30 B (2nd floor), PO BOX 157, 00121 Helsinki, Finland
Tel. +358 103 665 111, fax +358 103 665 110