The Concordatto has been regulated within the scope of the “Law on the Amendment of the Execution and Bankruptcy Law and Some Laws” numbered 7101, which was accepted on 28.02.2018 and published in the Official Gazette dated 15.03.2018 and numbered 30361. The most fundamental change brought within the scope of this law is the repeal of the “Delay of Bankruptcy” and the replacement of the Concordatto.
Concordatto protects the debtors whose financial situation deteriorates and has difficulty in payment from foreclosure and bankruptcy pressure within a certain period of time, and enables them to improve their financial situation and maintain their economic existence. The debtor, who has applied for concordatto, asks his creditors to give him a term to pay his debts and/or to make a deduction from some of his debts in the preliminary project he will submit with the concordatto request.
GENERAL INFORMATIONS ABOUT CONCORDATTO
In the concordatto, two periods were determined as a temporary and as a definite deadline. After it is determined that the documents are complete, the Court appoints a temporary concordatto commissioner and states that it will make its decision in a temporary period of three months and if it deems necessary, the Court can extend this period for a maximum of two months. These periods are temporary concordatto periods.
The appointed commissioner monitors the debtor’s activities during this temporary period, performs other duties assigned by the court, and submits his report to the court. Upon the creditors’ acceptance of the concordat, the concordat is submitted to the Court for approval. After the approval of the Court, the commissioner starts for duty and the definite period begins. The definite period is 1 year, and this period can be extended for another 6 months, depending on the circumstances.
With the announcement to be made within this period, the creditors should be invited to declare their receivables within fifteen days from the date of announcement, and also a copy of the announcement should be sent by mail to the creditors whose addresses are known.
If time is given for the concordatto, Enforcement Proceedings cannot be carried out within this period (there are exceptions such as employee receivables). Again, during this period, the power of legal act on the debtor’s property is restricted.
On the other hand, due to the receivables secured by pledge during the deadline, proceedings can be initiated by converting the pledge into cash or the proceedings that have started can be continued, but due to this follow-up, preservation measures cannot be taken and the pledged goods cannot be sold.
The debtor may continue his work under the supervision of the commissioner. In so far, the Court may decide that some transactions are valid only with the permission of the commissioner, or that the commissioner continues the operation of the business instead of the debtor, while giving a respite decision or within the deadline. Without the permission of the court, the debtor cannot establish a pledge, cannot be a guarantor, transfer the permanent installation of the real estate and the enterprise, even partially, cannot encumbrance or make gratuitous dispositions, without the permission of the court. Otherwise, the transactions are invalid. Before the court decides on these transactions, The Court has to get the opinion of the commissioner and the creditors’ board.
More than half of the creditors and receivables registered for project approval in the concordat or one-fourth of the registered creditors must have two-thirds of the receivable. To give an example, in the first case, if we consider that the registered creditors are 100 people and the recorded receivables amount is 100.000.00 TL, for the concordat project to be accepted, 51 of the 100 people must accept and the amount of the receivables of those who accept must exceed 50.000,00 TL.
In the second possibility, if we consider that the number of registered creditors is 120 people and the value of recorded receivables is 120.000,00 TL; In order for the concordatto project to be accepted, at least 31 of that people must be accepted and the amount of the receivables of those who accept must exceed 80.000,00 TL. For the concordatto, sufficient collateral must be provided for the receivables stipulated in the law, and the expenses and fees required for certification must be stored.
If the debtor does not act in good faith or violates his obligations, the Court may lift the deadline and request bankruptcy. Each of the creditors may request the bankruptcy of the debtor, even if the debtor is not one of the persons subject to bankruptcy, within 10 days after the decision to lift the deadline becomes final and the decision is announced.
