Proceedings / Effects of Registration
Can judicial decisions opening insolvency proceedings be registered in the Land registry in accordance with your legislation?
If affirmative, what effects do these registrations produce?
In Estonia insolvency proceedings are regulated in Bankruptcy Act.
Judical decisions opening insolvency proceedings can be registered in the Land Registry as a notation according to Law of Property Act § 63 (1):
(1) A notation may be entered in the land register:
– for the complete or partial prohibition of the disposal of ownership or restricted real right (notation concerning prohibition);
– for the demonstration of other circumstances, the entry of which in the land register is permitted by law (notation).
Notation concerning prohibition of disposition
Bankruptcy Act § 20 (1): A court may prohibit during the procedure of bankruptcy a debtor from disposing of assets without the consent of the interim trustee. A restraint on disposition may be applied with regard to all or part of the assets.
A notation shall be made on the basis of the bankruptcy ruling.
Notation concerning the declaration of bankruptcy of the owner
Bankruptcy Act § 40:
Notations shall be made in the land register concerning declaration of bankruptcy:
– next to the entries concerning the immovables owned by the debtor according to the land register;
– next to the entries concerning the limited real rights held by the debtor or the rights on such rights if it may be presumed that failure to make such notations would damage the interests of the creditors.
A notation shall be made on the basis of the bankruptcy ruling. The ruling shall be forwarded to the registrar by the court. If bankruptcy is declared on the basis of the Council regulation (EC) No 2015/848, such application may be submitted also by any other competent authority of the state which declared the bankruptcy.
If a trustee transfers an immovable or right specified in subsection (1) of this section in the course of the bankruptcy proceedings, the trustee shall submit an application for the deletion of the corresponding notation.
Effect of the notation
The purpose and effect of the notation is to inform and reveal the loss of the disposal of the owner’s immovable property and its transition to the bankruptcy trustee.
The entry is declarative because upon declaration bankruptcy, the debtor’s right to manage and dispose of the bankruptcy estate transfers to the trustee unless otherwise provided by law (Bankruptcy Act § 36 (1).
