A Finnish district court has declared 23 housing firms owned by construction company Lakea bankrupt. The court made the decision on Tuesday.
Trustee lawyer Touko Raitis has been appointed to manage the housing firms' estates. The parent company Lakea was already declared bankrupt in August.
The bankruptcies stem from financial difficulties at Lakea, which is owned by several municipalities in western Finland. Lakea owns 24 housing companies operating under the 'Omaksi' ownership model. All housing firms became insolvent due to the parent company's financial troubles.
Creditors filed the bankruptcy applications against the housing firms. The largest creditors include Municipal Finance and Handelsbanken.
Lakea managed housing properties across nine Finnish cities: Espoo, Jyväskylä, Järvenpää, Kuopio, Riihimäki, Seinäjoki, Turku, Vaasa and Oulu.
The city of Seinäjoki holds the largest ownership stake in Lakea at approximately 21.7 percent.
Raitis noted that one property in Turku called Nuutinkulma was missing from the bankruptcy applications. The reason for this omission remains unclear.
The bankruptcies will likely lead to apartment buildings being put up for sale. This situation highlights the risks when municipal-owned construction companies face financial collapse, potentially affecting hundreds of residents across multiple cities.
International readers should understand that Finland's housing system often involves residents owning shares in housing companies that own the actual buildings. The 'Omaksi' model referenced here is a specific ownership arrangement common in Finnish housing.