Concordatum / Arrangement of Bankruptcy

Apart from its long existence in the Turkish laws, concordatum could be deemed as a new exercise in Turkish Law, arising from the very recent amendments which canceled the “suspension of bankruptcy” and stipulated the concordatum process. Suspension of bankruptcy had been widely criticised of causing irreparable damages to both debtors and creditors due to the lack of an inspection mechanism on the process. Debtors could act in bad faith and transfer their assets to third parties, or creditors could seize and sale the materials that are essential to keep the debtor company operate. Thanks to concordatum, now debtors can come up with a payment scheme and procure acceptance of it from the creditors; and such payment scheme’s period cannot extend 23 months, furthermore the enforcement proceedings such as “seizure and sale” against the debtors would pause within this period. The aim of the concordatum is to provide benefits to both sides, by keeping the debtors’ organization to run and preventing the comprise of dead loans.