Konkursiseadus

Konkursiseadus is the Estonian Insolvency Act, the primary statute governing insolvency and bankruptcy procedures in Estonia. It provides the legal framework for dealing with financial distress, aiming to balance the interests of debtors and creditors while preserving value and enabling business continuity where possible.

The act applies to individuals and legal entities with assets or activities in Estonia. It sets out the grounds for initiating insolvency proceedings, who may file (the debtor or a creditor with a justified claim), and the conditions under which a court may intervene. Once proceedings are opened, the act provides for provisional measures to protect the debtor’s estate and to prevent actions that could prejudice creditors.

A central feature is the appointment of an insolvency administrator who takes control of the debtor’s estate, manages assets, and oversees the process of realization and distribution. The procedure can lead to liquidation of the debtor’s assets or to a restructuring plan designed to restore solvency, depending on what is feasible and in the best interests of creditors.

The act governs creditor participation, including filing and verification of claims, the conduct of creditors’ meetings, and the hierarchy of claims for distribution. Secured and unsecured creditors are treated according to established rules, with procedures for the equitable distribution of available assets.

Konkursiseadus also provides rules on the resolution of ongoing contracts, the impact of proceedings on employment relationships, and, where applicable, cross-border insolvency cooperation and court supervision. It is periodically amended to reflect changes in commercial practice and European Union law.