In short
A concordat is a regime of restructuring under the supervision of the court. It is not the automatic copy of bankruptcy. The general note on enforcement attachment stands apart.
A provisional moratorium can stop a creditor's transaction. It does not extinguish every claim.
Commercial collection is the face of an ordinary proceeding.
The commercial court in Ankara is looked at for the papers of the file.
Related notes: commercial law; the concordat moratorium; an action for bankruptcy.
When the cash cycle is blocked, the sentences on the table harden: "let us declare bankruptcy", or "we will recover with a concordat". The two are not the same door. A concordat is not a picture of an amnesty in which the debt is erased. It is an attempt at restructuring presented to the creditors by the procedure the statute draws. Bankruptcy is, as a rule, the path of liquidation. The confusion leads both the debtor and the creditor into a wrong expectation.
This note tells, in a general frame, what a concordat is, the arrangement of the moratorium and of the commissioner, the position of the creditor, and the difference from bankruptcy. There is no promise that "the enterprise will be saved". The result depends on the project, on the vote, on the approval of the court, and on the financial reality. The summary of the field is on the enforcement and bankruptcy law page. The company organs and representation intersect with commercial law.
What is a concordat?
A concordat is the debtor's asking the court for a moratorium, when they cannot pay the debts that have fallen due, or under the danger of not being able to pay, and trying to reach an understanding with the creditors on a project. The project can contain a term, a reduction, an instalment, or similar arrangements. The understanding is not an agreement at a coffee table. The statute seeks the record of the claim, the commissioner's report, the thresholds of the vote, and the approval of the court.
The application is open for debtors subject to bankruptcy, and for the other persons the statute permits. Not every tradesperson, and not every consumer, can enter this path. If the papers of the application — the financial tables, the list of creditors, the draft of the project, the inventory of assets — are incomplete, even the provisional moratorium stays open to discussion. The sentence "the cash has run out" does not take the place of a petition.
A concordat rests on the assumption of good faith and of feasibility. Allegations of removing assets, of producing a false claim, or of deliberately melting the capital can cause the lifting of the moratorium, and the criminal dimension, to be spoken of apart. This note does not widen the criminal regime. It only marks the procedural risk.
The moratorium, the commissioner, and the creditors
The moratorium is the stage of protection that stops the pressure of enforcement for a certain period and on certain conditions. The provisional moratorium is the first sieve. The definitive moratorium is the principal period in which the project matures and is voted. The periods are counted in the statute and can change. Rather than writing a count of months by rote, the current text should be checked. The moratorium does not erase the debt. The discussions of interest, of the pledge, and of preference stand apart in the text of the project.
The commissioner is the supervisor the court appoints. They examine the assets, follow the dispositions, assess the notifications of claims, and write a report. The commissioner is not the representative of one of the parties. A sale, a mortgage, or a payment contrary to the instruction opens the discussion of the process ending early. If the creditor does not notify their claim with its document, they can stay weak in the vote and in the project.
The creditors' committee joins the process on files that pass certain thresholds. A creditor secured by a pledge, a preferential creditor, and an ordinary creditor do not sit in the same ballot. The power of the vote changes according to the character of the claim. The discipline of documents on the page how is a commercial claim collected? is useful in the record of the concordat too. A balance without an invoice and without a contract is discussed before the commissioner.
Opening a new proceeding with a judgment or without one during the moratorium is, as a rule, limited. The exceptions — in particular some claims secured by a pledge, and public claims — are reserved in the statute. The sentence "every enforcement has stopped" should not be built before the text of the decision is read.
The difference from bankruptcy
Bankruptcy is the path on which the assets are liquidated and the price is distributed according to the schedule of ranking. On most files the enterprise breaks up. The continuation of the activity is the exception. A concordat aims at the continuation of the activity as far as possible, and at the collection of the claims according to the project. The aim is not a table of the result. If the project is refused, or if the moratorium is lifted, the door of bankruptcy can open.
For the creditor, bankruptcy is being written on the estate and waiting for the share of the liquidation. For a concordat, the creditor is reading the project, voting, and following the payment after the approval. A project that contains a reduction should not be worse than the probable share in bankruptcy. The court discusses this criterion. The assumption "a concordat is always more profitable" does not stand without figures.
For the debtor, bankruptcy is the narrowing of the power of disposition, and the bankruptcy administration taking the place of the organs. In a concordat the debtor can continue their activity under the commissioner's supervision. It is not an area for removing assets freely. Both paths affect reputation and credit relationships. This effect is not a promise of a legal result. It is an actual fact.
How does the process work, step by step?
The typical course can be thought of in this way:
- Drawing out, honestly, the financial table and the burden of debt that has fallen due
- Preparing the request for a concordat and the documents of the provisional moratorium
- The court's decision of the provisional moratorium and of the commissioner
- The announcement to the creditors, the notification of claims, and the examination
- The assessment of the definitive moratorium, and the possibility of extension or of lifting
- The writing of the project, the negotiation with the creditors, and the vote
- The court's decision of approval or of refusal
- Following the payments after the approval, and the sanction in the event of a breach
- The discussion of bankruptcy and of liquidation on a refusal or on a failure
Every step produces its own objection. An objection to the provisional moratorium, an objection to the record of the claim, and an objection to the vote on the project are separate procedures. The approach "the moratorium came out once, the work is finished" misleads both the creditor and the debtor.
The same national frame applies in the commercial and enforcement practice in Ankara too. The local workload affects the pace of the report and of the hearing. It does not, on its own, change the threshold of the vote.
The request for a provisional moratorium depends on whether the court sees the papers as complete in form. An incomplete inventory, a balance sheet that is not current, or an obvious gap in the list of creditors weakens the request on the first day. When giving the provisional moratorium, the court can also consider an additional measure similar to a trustee. This is not automatic on every file. The debtor's dispositions outside the ordinary daily activity — a sale of immovable property, a new pledge, a transfer of resources to an affiliated company — can be tied to the permission of the commissioner or of the court. A transaction without permission causes both the lifting of the moratorium and the fate of the disposition to be spoken of.
An objection to the record of the claim runs with the commissioner's examination and with the decision of the court. A false or inflated claim disturbs the balance of the vote. Balances without an invoice, written in favour of the debtor's relatives, are often inspected for this reason. The creditor should not stay silent when they see a partial acceptance of their own record. The period for the objection depends on the announcement and on the service. Going to the vote on the project before the record becomes final opens a discussion of the majority afterwards.
The debtor's daily management of cash, throughout the moratorium too, depends on the reality of the invoice and of the payroll. The commissioner separates the ordinary activity from the extraordinary disposition. The personnel wage and the necessary operating expense are spoken of on most files for the continuation of the activity. A transfer of resources to a related person is read apart. This separation breaks the perception "there is a moratorium, every payment is free".
Whom it concerns, and which risks there are
- Companies subject to bankruptcy that are in a cash tightness, and their competent organs
- Suppliers who see an invoice claim, or a claim under a judgment, at the wall of the moratorium
- Banks secured by a pledge, and financing creditors
- The surety, and the representatives on the signature circular
- Workers, and public claims (the order of preference is read apart)
For the debtor, the risk is taking the moratorium for a game of gaining time. A project that is not realistic both returns from the approval and damages the reputation. For the creditor, the risk is missing the announcement and not entering the record, or accepting the project without reading it. The reduction may not be "a little discount". The term can spread over years.
The authority to apply is tied to the company's articles of association and to the decision of the organ. An unauthorised signature opens the validity of the request to discussion. This is the intersection with commercial law.
Where the file is read from
The concordat file is read from the decision, from the commissioner's report, and from the record of the claim, and this note does not write the days of the moratorium into this text. A lawyer in Ankara reads from the file that the office being in Çankaya does not choose the competent court. This note does not build a general rule in this note for a claim secured by a pledge. This note does not count bankruptcy and restructuring as the same door.
- Do not take the moratorium for the erasure of the debt
- Do not pass over the commissioner's instruction as if it were internal correspondence
- Do not leave the claim as an undocumented "balance"
- Do not put the pledge, the preference, and the ordinary claim in the same basket
- Do not choose bankruptcy and a concordat with an emotional label
- Do not tie the threshold of the vote to a percentage by rote; look at the current text
- Do not forget that the proceedings that stopped will wake when the moratorium is lifted
A concordat is a statutory procedure of restructuring. The continuation of the activity can be aimed at. A result is not tied without the approval of the creditors and the decision of the court. A guarantee of rescue, or of liquidation, is not in this note.
The postponement of bankruptcy, the pledge, and employment claims
The old institution of the postponement of bankruptcy does not take the place of the concordat regime in force. Even if it gives a similar feeling of protection, the papers, the moratorium, and the vote are tied to another statutory backbone. The sentence "we used to take a postponement, and it is the same now" causes the file to be opened with the wrong documents. The current path is the request for a concordat and the supervision of the commissioner.
A creditor secured by a pledge is not affected by the moratorium in the same way as an ordinary creditor. Turning the pledge into money can run in a limited way, with the exceptions in the statute and with the instruction of the court and of the commissioner. The shortfall of the pledge can be spoken of in the vote like an ordinary claim. The calculation of the shortfall changes the text of the project. Reading a bank credit as "the moratorium stopped it, the security has ended" stays incomplete on most files. The mortgage, the pledge, and the letter of guarantee should be written on the inventory one by one.
Employment claims and public claims can be affected differently from the reduction of the project, because of the order of preference. The place of the heads of the wage, of severance, and of notice inside the concordat should be checked according to the current text of the article. The worker should not take the moratorium for "the claim was erased". An employment claim that is not entered on the record stays weak in the vote. The exception of a public claim does not fit the sentence "every tax stops", by rote, either.
A creditors' concordat is a door separate from the debtor's own request. Certain creditors, if the statutory conditions arise, can ask for a concordat against the debtor. This path arises from the need not to leave the cash crisis to the debtor's initiative. The conditions and the quorum depend on the regulation of the period. Rather than a rote of a fixed threshold, the current text should be looked at.
A breach of the project — the promised instalment not being paid, the removal of assets, a table contrary to the truth — gives rise to a sanction after the approval. The sanction can extend from the rescission of the project to the discussion of bankruptcy. The approval is not the sentence "we are comfortable now". It is the payment calendar actually working. The commissioner or the creditor can carry this breach to the court.
The financial tables, the independent audit, and the inventory in the papers of the application are the threshold of the provisional moratorium. An inflated claim, a hidden debt of an affiliated company, or false stock causes both the refusal and the later responsibility to be spoken of. The decision of the organ and the signature circular show who opened the request in the company's name. An unauthorised signature is the intersection with commercial law.
A closing frame
A concordat is a procedure that carries the cash crisis before the court and the creditors. The moratorium gives time, the commissioner supervises, the project is voted, and the court approves or refuses. Bankruptcy is liquidation. A concordat is an attempt at restructuring. The attempt can fail. For the creditor, the record and the vote are the backbone. For the debtor, an honest table and a feasible text are the backbone.
This note is general information. The path is not chosen without the concrete financial table, the structure of the pledge, and the current articles of the statute. The assessment changes according to the file. The expectation should be built not with a sentence of promise, but with the announcement, the report, and the minutes of the vote.
Frequently asked questions
Does a concordat save the company from bankruptcy?
There is no promise of rescue. A concordat enables the debtor to present to the creditors a project of payment or of restructuring, by the procedure the statute provides. The aim is that the activity continues in certain conditions and that the claims are collected according to the project. If the project is insufficient, if the periods expire, or if the court does not see the conditions as having arisen, bankruptcy can still come onto the agenda. The moratorium can stop the pressure of enforcement for a time. This does not mean that the debt was erased. A result is not tied without the majority of the creditors and the approval of the court. Even if the majority of the creditors is formed, the court is not obliged to approve the project. This note is general information. Without a concrete financial table, it is not said that "it will be saved".
What does the moratorium mean?
The moratorium is the period of protection the court grants the debtor in the concordat process, in which enforcement proceedings, as a rule, stop or are limited. The provisional moratorium and the definitive moratorium are separate stages. Their periods are determined in the statute and should be checked according to the current text. The moratorium does not erase the debt. It grants time for the preparation of the project and for the creditors' assessment. The commissioner's supervision intensifies in this period. The extension or the lifting of the moratorium depends on the report and on the objections. The creditor should not take the moratorium for "the proceeding has ended". After a refusal of the project, the paths can open again. Rather than a rote of the period, the current text of the statute should be looked at.
What does the concordat commissioner do?
The commissioner is the person appointed by the court who holds the backbone of the process. They examine the debtor's assets and activity, assess the records of claims, present a periodical report, and convey to the court their observations on the realism of the project. The commissioner is not the lawyer of the creditors or of the debtor. They carry out a duty of supervision of a public character. A disposition contrary to the instructions can open the discussion of lifting the moratorium. The creditor may be obliged to notify their claim before the commissioner. The reports become the ground of the vote and of the decision of approval. The appointment of more than one commissioner is possible according to the character of the file. The commissioner's opinion is not, on its own, a judgment. The court assesses it.
What should a creditor do in a concordat?
The creditor should first notify their claim in proper form, and should present the supporting documents — the invoice, the contract, the judgment, the note — to the commissioner and to the file. A claim that is not notified can stay weak in the project and in the vote. The separation of a claim secured by a pledge, a preferential claim, and an ordinary claim affects the power of the vote. Opening a new proceeding during the moratorium is limited on most files. If the process is not followed, a loss of right can arise. The text of the project contains the term and the rate of reduction. "Acceptance without reading at all" is risky. For documenting a commercial claim, the frame of how is a commercial claim collected? is also useful. The concrete order depends on the announcements of the file.
What is the basic difference between a concordat and bankruptcy?
Bankruptcy is a path on which the debtor's assets are, as a rule, liquidated and distributed to the creditors. A concordat is built on the rearrangement of the debts and, if possible, on the continuation of the activity. In bankruptcy the enterprise often breaks up. In a concordat, not breaking up can be aimed at. The aim is not a guarantee of the result. If the concordat fails, the door of bankruptcy can open. For the creditor, bankruptcy is the schedule of ranking and the share of the liquidation. A concordat is the project and the vote. Both are inside enforcement and bankruptcy law. The choice depends on the financial table and on the statutory conditions. The emotional separation "bankruptcy is bad, a concordat is good" is not enough.
Can every merchant request a concordat?
The statute frames who can ask for a concordat and which financial conditions are sought. Those subject to bankruptcy, and certain debtors, can apply on this path. Not every natural person is automatically the holder of the right. In the application, documents for the provisional moratorium — such as the financial tables, the list of creditors, and the draft of the project — are sought. Incomplete papers can lead to the refusal of the request. The sentence "the cash has run out" does not, on its own, open a file. Good faith, the sufficiency of capital, and the feasibility of the project are discussed by the court. The company organs and the authority of representation, in the dimension of commercial law, also affect the validity of the application. The conditions should be checked according to the current text.
What happens to the existing enforcement proceedings during the moratorium?
With a decision of a provisional or a definitive moratorium, the acts of the proceeding, as a rule, stop, or the opening of a new proceeding is limited. Exceptions for proceedings on a pledge, and for some public claims, take a place in the statute. "Everything has stopped" is not said by rote. The difference between a proceeding with a judgment and one without does not, on its own, determine the regime of the moratorium. What determines it is the provisions of the concordat and the character of the claim. When the moratorium is lifted, the proceedings that had stopped can run from where they left off. The fate of the attached goods depends on the instruction of the commissioner and of the court. If the creditor does not follow the announcements and the service, they can be counted as having forgotten the file that stopped. The current text of the decision should be read.
How is a concordat project accepted?
The project is voted with the thresholds of majority and of amount that the statute provides. The court then approves it. Only a majority of number, or only the amount of the claims, is not always enough. The two can be sought together. The shortfall of the pledge, and the preferential claims, can be calculated apart. The court also examines criteria such as the project's not being worse for the creditor than bankruptcy, and honesty. A departure from the procedure of the vote damages the approval. A refusal can open the discussion of bankruptcy, or of the ending of the process. The thresholds and the exceptions depend on the regulation of the period. Rather than a rote of a fixed percentage, the current statute should be looked at. The possibility of acceptance is not spoken of without a concrete table.
Conclusion
This note is for general information. The document, the period, and the procedure of the concrete event should be read separately. There is no promise of a result by rote.
The basis is in the text of the Enforcement and Bankruptcy Code.