The steps of bankruptcy proceedings in brief
When a natural or legal person (company) can no longer fulfil its obligations as they fall due, that person is said to be insolvent.
When a person is insolvent, bankruptcy proceedings are launched against the estate of said person. Bankruptcy proceedings are launched when either the debtor himself or a creditor submits a bankruptcy request to the local probate court or the Danish Maritime and Commercial High Court (Sø- og Handelsretten).
From the time when the probate court or the Maritime and Commercial High Court issues a bankruptcy order, the person loses their right to dispose of their assets. For example, the person can no longer transfer their assets or receive payment.
The probate court appoints a person responsible for the estate, a trustee. The trustee must collect information about assets and liabilities, settle any outstanding balances, liquidate assets, etc. When the trustee's work is completed, the estate’s final accounts are drawn up. In some cases, money is distributed to the creditors at this stage. In other cases, the final accounts are drawn up and the estate wound up because the trustee finds that there are no funds to cover the cost of continued case processing for the estate.
The rules governing bankruptcy proceedings in Denmark can be found in the Danish Bankruptcy Act (Konkursloven).
When Koda members go bankrupt
Occasionally, a Koda member – a composer, lyricist or music publisher – is declared bankrupt.
A Koda member’s bankruptcy will be dealt with in accordance with the general bankruptcy rules. However, because copyright is a special form of property, the trustee cannot simply sell the works or work shares created by the composer, copywriter or publisher the way that he would sell inventory from a bankrupt restaurant or bookstore.
So if you or your music publisher goes bankrupt, it is important for you and for Koda’s management of your rights that you contact Koda’s Repertoire Department as soon as possible.
Koda will then contact the bankruptcy estate trustee in order to inform them of the distinctive nature of copyright and your Koda rights.