After the estate of a debtor is declared bankrupt, a new entity is created, a bankruptcy estate, which is managed by a court-appointed administrator. The Bankruptcy Act no. 21/1991 (“Bankruptcy Act”) governs bankruptcy proceedings. The Bankruptcy Act states that all claims automatically fall due when the bankruptcy ruling is issued.
Creditors must file their claims with the administrator within a certain claim filing period, which is customarily two months. The beginning of the period is based on the date of publication of the call to creditors in the Official Gazette. The publication of the Official Gazette is only electronic and available in exchange for a certain fee. Article 117(2) of the Bankruptcy Act states that all claims must be filed in writing and must fulfil certain minimum requirements. If a claim is filed with the administrator after the declaration period, the claim is null and void, according to Article 118(1) of the Bankruptcy Act.
In practice, many creditors have filed claims with the administrator via email and requested confirmation from the administrator that the claim is duly received. Creditors have generally sent a printed original of the claim via post service to the administrator and requested a receipt of delivery. Furthermore, some creditors appear in person with the claim to ensure that it is delivered to the liquidator within the claim filing period.
Rumour has it that some administrators confirm receipt of claims by e-mail and base its legal effect on the date the email is received. Judgments of the Supreme Court of Iceland in cases no. 619/2010 and 557/2013, addresses this issue. The Supreme Court came to the conclusion, in both judgments, that Article 117(2) of the Bankruptcy Act should be interpreted that the claim together with supporting documents must be received in paper form within the claim filing period at the administrator’s office (or to the place specified in the publication of the bankruptcy ruling in the Official Gazette), but not only electronically as was done in both cases, but was not considered sufficient.
It follows from these judgments that claims and their supporting documents must be received by the administrator in paper within the claim filing period. That means that the administrator receives hundreds, if not thousands of pages of claims and supporting documents in each bankruptcy estate. After the claims are received, they are scanned into the case system of the administrator, so it can be assumed that printed originals are unnecessary in practice.
It should be noted that in the last few months, the undersigned have received three claims in bankruptcy estates after the claim filing period had expired. In all instances, they arrived too late because the Post Office took longer to deliver the claims than the creditors had expected. Creditors thereby had to accept responsibility for postal services they actually paid for.
The year is 2023. There has been a great awareness of environmental issues in this country as well as elsewhere. Public and private companies strive to reduce the environmental impact of their operations and have implemented measures that reduce use of paper. One can wonder why a new provision has not been added to the Bankruptcy Act, that allows administrators to receive claims and supporting documents electronically. This would result in positive environmental effects and be much more efficient than the current framework.