Ordinary Concordat
rdinary concordat refers to the debtor continuing their business operations with the assets remaining after the liquidation of their debts. The primary objective is to ensure that the debtor can sustain their commercial activities.
Ordinary concordat refers to the debtor continuing their business operations with the assets remaining after the liquidation of their debts. The primary objective is to ensure that the debtor can sustain their commercial activities. Under our legal system, the ordinary concordat is divided into two main categories: concordat within bankruptcy and concordat outside bankruptcy.
Ordinary Concordat Outside Bankruptcy Proposing a Concordat A debtor who is unable to pay their debts despite them becoming due may request a concordat. In addition to the debtor making this request, any creditor holding a receivable against the debtor is also entitled to file an application, via a reasoned petition in accordance with the Execution and Bankruptcy Law, for the initiation of concordat proceedings against the debtor. There is a twofold distinction in determining the competent courts with jurisdiction for making a concordat proposal; (i) The competent court with jurisdiction for debtors subject to bankruptcy: The commercial court of first instance located at the debtor's principal place of business, or if their headquarters is abroad, the location of their central branch in Turkey. (ii) The competent court with jurisdiction for debtors not subject to bankruptcy: The commercial court of first instance at the debtor's place of domicile.
Information and Documents Required in a Concordat Proposal A debtor seeking debt regulation and restructuring must substantiate this request on solid grounds. This requirement is also regulated under Article 286 of the Execution and Bankruptcy Law, and the relevant provision is embodied in our law as follows. Upon examining the wording and the essence of the article, it is possible to state that the documents required from the debtor are (i) the preliminary concordat project, (ii) documents determining the assets, (iii) a list showing the creditors, the receivable amounts, and the privilege status of the creditors, (iv) a comparative table of benefits, and (v) financial analysis reports. While the second paragraph of the same article stipulated that the date of the financial statements to be submitted to the court could be a maximum of forty-five days prior to the application date, the relevant paragraph [was amended by] the dated 19.12.2018...