Housing firm Lakea files for bankruptcy after failed restructuring

The property development company Lakea has filed for bankruptcy at the Pohjanmaa District Court following years of worsening financial problems and rising debt obligations.

In a statement released on Tuesday, the company confirmed that it will also withdraw earlier restructuring applications submitted in May on behalf of 24 housing cooperatives operated under its Omaksi model. The firm said the decision followed a lack of support from key creditors.

Board members of both Lakea and its Omaksi housing subsidiaries announced their resignations the same day.

The Lakea Group includes subsidiaries such as Lakea Kiinteistöt, Lakea Kiinteistökehitys, and Lakea Palvelut. According to the statement, these entities will continue operations despite the parent company’s bankruptcy filing.

The court is expected to process the application within a week.

Lakea stated that the bankruptcy will not immediately affect existing tenants or residents in its Omaksi properties. A court-appointed estate administrator will review contracts and determine the legal standing of each agreement once proceedings begin.

The company has faced mounting financial pressure in recent years, driven in part by sharply increased financing costs. In the summer, creditors filed separate bankruptcy petitions against 24 of Lakea’s Omaksi housing cooperatives due to unpaid debts.

Lakea’s business model combined renting with gradual home ownership. Tenants entered into agreements by paying an upfront seven percent of the property’s value, then lived in the unit as renters while incrementally acquiring ownership through continued payments.

In May, the company submitted restructuring applications aimed at salvaging both the parent company and its affiliated housing units. The goal, according to Lakea, was to protect the rights of residents, partners, and staff more effectively than through bankruptcy.

However, support from creditors never materialised.

In July, law firm Heikkilä & Co announced it had filed a criminal complaint on behalf of 235 individuals connected to the Lakea case. According to police, most of the complainants were residents of the housing companies now involved in the bankruptcy process.

Detective Chief Inspector Sakari Palomäki of the Ostrobothnia Police said a preliminary investigation had been opened to determine whether any criminal conduct took place. He confirmed that over 200 individuals had already been identified as potential injured parties.

Some residents claim they were misled by the company’s financial structure and have been unable to recover funds paid under the rent-to-own scheme.

HT