POSTPONEMENT OF BANKRUPTCY WILL NO LONGER BE AVAILABLE
Law Amending the Bankruptcy and Enforcement Law and Some Other Laws for Improvement of Investment Environment (the “Law) is accepted by the Turkish Grand National Assembly on 28.02.2018. The Law shall enter into force upon rectification by the President.
- Postponement of Bankruptcy, implementation of which has been suspended during the State of Emergency, shall be abolished by Article 3 of the Law, which provides the concordatum procedure established in its Article 12.
- Via this change, the equity companies and cooperatives shall be able to request concordatum from courts. It has been stated in preamble clauses of the Law that, the amendment in the system has been a necessity duty to the fact that, the creditor had no active role during the postponement of bankruptcy process and that the execution of this process has been handled solely between the debtor and court, and the problems experienced during the litigation proceedings..
- According to the Law, in order to request the announcement of concordatum from the court, the debtor should present certain evidence proving its financial difficulties in fulfillment of its debts or strong evidence that it will be in such position in near future. Should it debtor would be eligible upon the discretion of the court for such concordatum, it a temporary period of three (3) months for improvement of its position. This temporary period shall only be exceeded for an additional two (2) months.
- According to the Law, instead of postponement of bankruptcy, corporations shall enter given a recovery period, which can last for maximum 23 months, upon which the creditor and the agree upon a payment plan.
- During this recovery period, execution and seizure proceedings shall not be conducted and in case it is understood that the concordatum is going to succeed, a peremptory term of one (1) year shall be given to the debtor by the Court and a Board of Creditors shall be established in this term.