Insolvency Law at Greenland (Denmark)
Greenland, as an autonomous territory within the Kingdom of Denmark, adheres to Danish insolvency laws, including the Danish Bankruptcy Act. Consequently, the insolvency framework in Greenland mirrors that of Denmark, encompassing both personal and corporate insolvency procedures.
Personal Bankruptcy
In Greenland, individuals facing financial distress can initiate personal bankruptcy proceedings. These proceedings are conducted by the district court with jurisdiction over the debtor's place of residence. A bankruptcy petition can be filed by the debtor themselves or by a creditor to whom the debtor owes money that remains unpaid. (Danmarks Domstole - Personal bankruptcy)
Key Aspects:
Court Fees: As of October 1, 2021, a court fee of DKK 1,500 is required to file a bankruptcy petition. (Danmarks Domstole - Personal bankruptcy)
Trustee Appointment: The bankruptcy court appoints a trustee after consulting with the attending creditors. The trustee assumes control over the debtor's assets and liabilities, managing the liquidation process. (Danmarks Domstole - Personal bankruptcy, Insolvency 2024 - Denmark | Global Practice Guides | Chambers and Partners)
Order of Priority: Creditors are paid in a specific order, starting with costs associated with the bankruptcy proceedings, followed by wages and salaries, outstanding taxes, and finally, unsecured debts. (Danmarks Domstole - Personal bankruptcy)
Corporate Insolvency
For businesses in Greenland, corporate insolvency proceedings are governed by the Danish Bankruptcy Act. These proceedings aim to either liquidate the company's assets or facilitate a restructuring process. (Corporate insolvency & restructuring report 2021: Denmark | IFLR)
Key Procedures:
Bankruptcy (Liquidation): Initiated when a company is unable to meet its financial obligations. A trustee is appointed to liquidate assets and distribute proceeds to creditors. (Insolvency 2024 - Denmark | Global Practice Guides | Chambers and Partners)
Preventative Restructuring: Allows a company to seek court protection from creditors while attempting to reorganize its operations and finances. This process can be initiated by the debtor and may include an enforcement stay to prevent creditor actions. (Insolvency 2024 - Denmark | Global Practice Guides | Chambers and Partners)
Ordinary Restructuring: Involves negotiations with creditors to agree on a restructuring plan, which may include debt rescheduling or reduction. This process requires court approval and creditor consent. (Danmarks Domstole - Personal bankruptcy)
Directors' Duties and Liabilities
In Greenland, as in Denmark, directors of distressed companies have specific duties: (Corporate insolvency & restructuring report 2021: Denmark | IFLR)
Duty to File for Insolvency: If a company is insolvent, directors are obligated to file for bankruptcy proceedings. (Corporate insolvency & restructuring report 2021: Denmark | IFLR)
Duty of Disclosure: Directors must provide the bankruptcy court and the trustee with all necessary information for the administration of the estate. (Danmarks Domstole - Corporate insolvency)
Liability for Mismanagement: Directors may be held liable for gross mismanagement, including fraudulent transfers or failure to maintain proper financial records. (Corporate insolvency & restructuring report 2021: Denmark | IFLR)
Cross-Border Considerations
Denmark, including Greenland, is not bound by EU regulations concerning insolvency proceedings. However, under the Nordic Bankruptcy Treaty, Denmark recognizes bankruptcy proceedings initiated in other Nordic countries. This facilitates cross-border insolvency matters within the Nordic region. (Insolvency 2024 - Denmark | Global Practice Guides | Chambers and Partners)
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