Concordat Procedure as a Way to Escape Bankruptcy and the Evaluation of the Temporary Respite Decision Following the Amendment to the Law no. 7101: Current Developments and Experiences in Turkey

Abstract

Concordat is a restructuring law which enables the debtor whose business does not go well and economic situation has deteriorated due to reasons beyond his control to pay their offer under proper conditions after the offer is accepted by the number of creditors provided in the law and ratified by the authorities. The legislator has opened the way for the debtors to terminate their debts by paying only a certain amount of them or at certain maturities by an agreement between the debtor and the creditor under the court supervision with the arrangement of bankruptcy. The significant legal amendments to the Law no. 7101 add another dimension to the concordat which is regulated by the provisions 285 and 309/I in Enforcement and Bankruptcy Law. The amendments in the Law no. 7101 regarding the provisions of concordat was affected by Swiss Enforcement and Bankruptcy Law. In these amendments, many provisions which prevented the concordat in the previous term were revised or revoked. The provisions on the postponement of bankruptcy that are in the favor of debtor were included into the concordat and temporary respite decision was accepted. Therefore, the followups that the creditors commenced will stop and new follow-ups will not start during the respite thanks to the opportunity to decide on temporary respite within the provisions on the concordat. Our study aims to make explanations and evaluations regarding the temporary respite decision which had not been included in Enforcement and Bankruptcy Law with the concordat procedure in Turkish Law until the significant amendments in the Law no. 7101. In this regard, general information will be provided about the concordat in Turkish Law, the concordat procedure will be explained and we will continue with the temporary respite following the request to arrange bankruptcy. Lastly, our study will be concluded with the evaluation of the concordat experience in Turkey within the current developments and implementation on the arrangement of bankruptcy.