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The concordat is regulated under Articles 285-309 of the Execution and Bankruptcy Law. Concordat aims to protect both the debtors in poor financial standing, as well as their creditors. If a debtor and a creditor agree on a concordat, the debtor clears his/her debts by paying the debt in line with the agreement stipulated under the concordat. Therefore, a concordat may be defined as a reconstruction agreement between the debtor and the creditors.

The Concordat is an agreement that even if some creditors do not take a part or agree to the concordat, it will be binding upon them. Therefore, to have a concordat, two different quora of creditors and the amount of debt must be agreed upon. Within this scope, the validity of a concordat is subject to approval of one-half of the creditors whose receivables exceed two-thirds of the total debt of the debtor.

In Article 4 of the Decree Law No. 669 published on 31.07.2016 within the scope of the state of emergency, the corporations are required to postpone the bankruptcy proceedings and the decision to postpone the bankruptcy proceedings is prevented. The concordat has come up again. Amendments have been in terms of concordat, within this scope the Law on Enforcement and Bankruptcy Law published in the Official Gazette dated 15.03.2018 and the Law on Amendment in Some Laws.



Any debtor who can not pay his debts on term, or who is in danger of not being able to pay his debts on term, may ask for a concordat to ask for a term or pay his/her debts with discount or to get rid of a possible bankruptcy. Any creditor who can ask for a bankruptcy may be demand (in our legislation, the situaiton of stock companies’ assets are more than their debts, is listed as a special reason for a bankruptcy) the commencement of debtor’s concordat by justifiable petition. According to the previous regulation this request was submitting to the Enforcement Court by adding a list that indicating the status of the books required to be kept. The obligation to add a list has been repealed in the light of Amending the Enforcement and Bankruptcy Law and Certain Other Laws. The competent and authorized authority; for debtors who are subject to this claim; is the debt enforcement office in the vicinity of the debtor’s procedure center.For debtors who are subject to bankruptcy,  debt enforcement office which is in nearby of the procedure center of the debtor, for the commercial enterprises which have abroad located centers, the branch in Turkey, if there is more than one branch, the debt enforcement office at the location of the main branch; and lastly is the basic commercial court in the settlement of the debtor who is not subject to the bankruptcy are competent for the commencement of the concordat procedure. The ordinary concordat is the way which the debtor can apply before it is decided to bankruptcy. First, one of the debtors or one of the creditors who can ask for a bankruptcy, applies to the enforcement court with a petition and offers a concordat project which is showing the how to pay the debts. The debtor also must include a detailed balance sheet and a table of income and expense to its project. If the enforcement court finds that the conditions of the concordate are met, it shall immediately issue a temporary respite decision of no more than three months.

In the previous regulation, the term “concordat respite” was changed to “Temporary respite”. If the commencement of concordat transactions has been requested by one of the creditors, a temporary respite decision will be decided if the debtor provides the necessary documents completely and within the reasonable time that the court will give. In this situation, the expenses required to prepare the mentioned documents and records will be paid by the creditor. If the documents and records are not submitted completely or not during time, temporary respite will not be decided, and the concordat request made by the creditor will also be rejected. Acceptance of a temporary respite request, the appointment of a temporary commissioner, the extension of a temporary respite, and decisions regarding measures can not be appealed.

Concordat provides an opportunity to benefit from the provisions of the concordat to a debtor who acted with integrity in his works and acted diligently however whose financial condition has been impaired. During this period, due to the fact that the there is not any executive proceeding against debtor, the debtor can make a concordat with the his/her creditors. The conditions for respite decision are: existence the possibility of the success of the concordat and absence of the intention to damage the debtor’s creditors.

The enforcement court examines the proposal of the debtor according to the simple trial procedure. The executive court listen debtor and creditor if creditor demanded. At the end of the review, if the court finds that the necessary conditions do not exist, the court rejects the request.

If the court finds that the circumstances exist, it accepts the request and appoints one or more concordat comissioner. The commissioner invites the creditors to the meeting and decides whether or not the voting final consent is acceptable. More than half of the creditors and two-thirds of the receivables are sought. Upon acceptance of the concordat by the creditors, the concordat will be presented to the commercial court.

If the commercial court confirms the concordat, concordat starts to generate its provisions and conclusions. If the debtor starts to pay off his debts in concordat terms and if the discount concordat is issued, debts of the debtor will be finished.

Confirmation conditions of concordat; the declared amount shall be proportional to the resources of the debtor, in the asset abondenment concordat, the proceeds obtained in the event of conversion into money or the sum offered by the third party  shall be more than the amount that can be obtained in case of liquidation by bankruptcy, the concordat shall be accepted with the necessary majority, adequate collateral has to be provided for the anticipated receivables, and the charges and expenses must be stored for confirmation.

Enforcement can not be executed against the debtor within the temporary respite, previously started enforcement execution will stop, cuttable statute of limitations and the rights does not proceed. Decisions on cautionary judgment and provisional seizure of the debts will be inapplicable.

Start enforcement by convert of pledge to money proceedings may be initiated or the initiated proceedings may be continued; but due to this protective measure can not be taken and pledged goods can not be sold.

The savings of debtor are limited within the respite. Apart from the consent of the enforcement court, pledge and mortgage can not establish sell immovable property, and can not transfer, restrict or guarantee any part of the permanent installation of the operation. Contracts prepared and signed for these are null and void.

If the debtor does not behave in good faith or does not comply to its obligations, the court removes the respite. Within 10 days after the announcement of the decision is, each of the creditors may request the banktrupcy of the debtor, even if debtor is not the subject to the ‘s bankruptcy.

The concordat, confirmed and entered into force by court, is compulsory for all the creditors who became creditor before the respite decision or without the consent of the commissioner. Pledged receivables and government receivables which are listed under article 206/1 are exceptional.

• Documents will be added to the Concordat Request:

The debtor shall attach the following documents to the concordat;

a)  Pay at what rate of the debt or on which term , in what amount creditors would be decide not to execute enforcement, whether debtor sell his/her existing property of the his/her to make payments, to continue the activities of the debtor and creditors through a capital increase or loan provision or another method to  provide necessary financial resources to make the payment or will be provided using concordat pre-project is required.

b) Documents showing the status of the properties of the debtor are as follows; if the debtor has responsibility to keep a book, the last balance sheet, income statement, cash flow statement prepared in accordance with the Turkish Commercial Code, the intermediate balances prepared on the basis of the continuity of the operation and the possible sale prices of the assets, the opening and closing approvals of commercial books and the electronically conducted books, other information and documents explaining the financial situation of the debtor, belongs to tangible and intangible assets, lists with book values, lists and documents showing all receivables and debts together with the balances.

c) The list of creditors, receivable amounts and the list of the receivable’s privileged status is required.

d) According to the pre concordat project proposals, table which is showing the prescribed amount into the hands of the creditors that can be passed into the hands of creditors in case of bankruptcy of the debtor.

e) The financial analysis reports and the supporting documents prepared by the independent audit firm authorized by the Capital Markets Board or the independent auditing firm authorized byAccounting and Auditing Standards Authority and showing that the proposal in the pre-concordat’s possibility to happen is high. This requirement shall not apply to small businesses within the scope of Article 28 of Decree Law on the Organization and Duties of the Ministry of Science, Industry and Technology No. 635 dated 3/6/2011.

The date of the financial statements submitted pursuant to this article has to be presented no later than forty-five days before the date of application.

The Borrower shall also submit other documents and records which may be requested by the court or the commissioner in the concordat process.

  • Temporary Respite:

Upon the concordat request, the court immediately decides the temporary respite when it finds that the documents specified in article 266 of the Execution Bankruptcy Law are completely available. The court takes any meaures to protect debtor’s asset including the situations listed under article 297 (“Debtor can not establish a pledge, guarantee, guarantee, immovable property and the permanent installation of the operator, in part, even if it is not allowed by court. Otherwise the transactions will be invalid. Court must ask for the view of the commissioner and the creditors’ board before giving a decision.”)

If the commencement of concordat procedures is requested by one of the creditors, a temporary warrant is issued in the event that the debtor delivers the documents and records referred to in Article 286 completely within the reasonable time in a time provided by the court. In this situation the creditor covers the expenses required for prepare the mentioned documents and records. If the documents and records are not submitted completely and not in time, temporary respite will not be decided, and the concordat request made by the creditor will be rejected.

The court shall appoint a temporarily concordat commissioner with a view to closely examine whether concordat is possible to reach the success within temporary respite. Three commissioners may be appointed when necessary to depending on creditor number and the amount of receivables. The article 290 applies   to this situation comparatively.

The temporary respite is three months. The court may extend the temporary respite by no more than two months upon the request of the debtor or temporary commissioner before the expiration of this period of three months, if the debtor has requested the extension, the temporary commissioner’s view has to takenThe total duration of the temporary respite may not exceed five months. Articles 291 and 292 are applied comparatively on temporary respite. It can not be resorted to by law for the acceptance of temporary respite, the appointment of a temporary commissioner, the extension of temporary agreements, and that is not able to appeal.

    • Temporary Respite Results, Declaration and Notification:

Temporary respite generates the results of peremptory term.

Temporary respite decision announces by court on the Trade Registry Gazette and Press Association Authority declares on the official announcement portals and notifies the: directorate of land registry, the trade registry directorate, tax offices, customs and postal administrations, Turkey Banks   Union, Turkey Participation Banks Union, the local chambers of commerce, chambers of industry, to the movable stock exchanges, to the Capital Markets Board and other necessary places. Declaration also states that creditors may want to rejection of concordat from court with the petition within seven days of the exact time from the announcement and argue that there is not any evidence showing requiring a temporary respite.

Court declares and notifies concerned authorities about decisions related to the extension of the temporary respite and removal of the temporary respite.

    • Peremptory Respite:

The court gives its decision on the peremptory respite during the temporary respite. In order to give a decision on the peremptory respite, the court invites the debtor and if exists, creditor who is demanded the concordat. Interim commissioner provides a written report before the hearing and, if court assumes necessary commissioner will be present at the hearing in order to give his/her statement. The Court will take into consideration the reasons in a petition of the objecting creditors, while evaluating.

If it is understood that there is a possibility for the concordat to achieve success, debtor take a one-year peremptory respite. With this decision, the court, decides to temporary commissioners or commissioners to continue their duty if there is no need to new assignment and gives the casefile to commissioner. The court may compose a creditors council limited by seven creditors at a time deemed appropriate by the decision within peremptory respite and any fees to determine and also council has to be in a single number. In this case, the creditors which are different from each other in terms of legal character, and if so pledged creditors, are represented in a fair manner on the creditors’ council. When the creditors council is establishing, the commissioner’s view also be taken. The council of creditors convenes at least once a month and decide by majority of votes. The commissioner shall be ready at the meeting and at this meeting commisioner takes the signatures of the attendants at the meeting to write to report. Considering the number of creditors, the amount of receivables and the diversity of receivables, the cases in which the creditors council is compulsorily to be established and other matters related to the creditors council indicates in the regulations put into effect by the Ministry of Justice.

In exceptional circumstances where difficulties exist, the peremptory respite may be extended by the court to six months on a justified report explaining this situation and request by the commissioner.

The debtor may also request an extension under this paragraph; in this case the commissioner also gives a view. In both cases, the extension request is made before the peremptory respite is issued and before the extension decision is made, if any, the council’s opinion has to be taken.

Decisions regarding peremptory respite, the extension of the peremptory respite and the rejection of the concordat request shall be announced in accordance with article 288 and shall be notified to the relevant authorities.


A person who has been decided to bankrupt can offer a concordat for the removal of this bankruptcy decision. This right is only known to the bankrupt debtor. In the period between the opening of the bankrupt’s estate and the exact distribution of the money, a concordat offer may be made. There has to be a possibility that the debtor will be successful and there should be no intent to harm the creditors. The debtor must also offer a payment proportional to its resources.

Bankrupt gives the concordat project to bankruptcy office during the bankruptcy liquidation. The bankrupt does not have to add to this project a detailed bill, an income table and the status of his books.

Concordat after the bankruptcy does not provide a temporary respite and a commissioner can not be appointed. Liquidation proceedings continue until the second creditors meeting. However, the convert of the assets to Money stops with the concordat offer until the confirmation of the commercial court on concordat. However, this period limited to 6 months.

Decision on the confirmation of the concordat bythe second meeting of creditors, will be submitted to commercial court which gave the bankruptcy decision with the confirmation of request by administration of bankruptcy. The commercial court shall examine and certify the terms of confirmation. When the decision is confirmed the court notifies the bankruptcy administration. The bankruptcy administration also requests, from commercial court which gave the bankruptcy decision, that the bankruptcy to be removed. If the commercial court rejects the request, the bankruptcy proceedings continue to liquidation. However, if the commercial court accepts this request, it removes the bankruptcy.



In cncordatum asset abondenment procedure, debtor authorizes the creditors to dispose on these assets or to transfer all or a portion of these assets to a third person. In this way, the creditors collect their receivables by liquidating the assets of the debtor. Liquidation officers may be chosen by creditors; but after the Enforcement Court approves the selected person, the dispose authority transfers to the creditors and liquidation officers. Liquidation officers disposes the assets of the debtor in a manner similar to the procedure in bankruptcy liquidation and distributes the obtained money to the creditors. The provisions of the ordinary concordat apply to the concordat through asset abondenment, as long as it does not contradict the nature of the work. Concordat through asset abandonment is a liquidation process which is protecting the creditor against the situation of not being able to collect his/her receivable and protecting the debtor against risk of sale of assets at low prices

    • Concordat commissioner and council of creditors and their duties:

According to article 290 of the Enforcement and Bankruptcy Law; the commissioner who receives the file shall return the file to the court together with the report by completing the procedures for certifying the concordat within the peremptory respite. The commissioner’s duties are:

  1. Contributing to the completion of the concordat project.
  2. Supervising the activities of the debtor.
  3. Performing the duties which are given by this law.
  4. Providing interim reports that the issues asked by court and in the appropriate time.
  5. Informing the council of creditors at regular periods about the progress of the concordat.
  6. Giving information about the status of the concordat and the current financial situation of the debtor.
  7. Fulfilling other duties given by the court.
    • Confirmation Conditions of Concordat:

According to article 305 of the Enforcement and Bankruptcy Law; the confirmation of the concordat project, which is agreed at the meeting of creditors and in the accession period, depends on the fulfillment of the following conditions:

    1. Understanding that the amount offered in the ordinary concordat will be more than potential amount to be in the hands of the creditors in the case of the debtor’s bankruptcy;  understanding that the revenue obtained in the event of the convert to money in concordat through abondanment of the asset or the amount offered by the third person has to be more than the amount that can be obtained in liquidation by bankruptcy.
    2. Proposed amount has to be proportional to the resources of the debtor.
    3. In the concordat project, it has to be accepted by majority as foreseen in article 302.
    4. The payment of the receivables of the privileged creditors on the first row of article 206 and the performing the debts contracted with the consent of the commissioner within the time limit shall be deposited adequately unless the creditor expressly abandon it.
    5. Costs have to be paid for the confirmation of the concordat and expenses from determined amount to be paid to creditors, are necessary to be deposit before the confirmation decision.   If the court finds that the concordat project is inadequate, it may ask to make the correction it deems necessary by itself or upon request.

• Decision of confirmation, scope and declaration of concordat:

It states in the confirmation decision of the concordat, to what extent the creditors will waive from their receivables and in what period the debtor will pay his/her debts. In the decision may be consist of, the necessary monitoring the ensuring the fulfillment acknowledged by the concordat, appointment of trustee to take the measures on liquidation and management. In this case, the trustee reports to the court which gave the confirmation decision, once in two months, about situation of the debtor’s operation and the ability to pay the debt; creditors can review this report. A decision of confirmation is announced by the court and notified to the relevant authorities.

    • Retention and sale of the pledged goods and deferral of retail of goods for financial leasing issues:

Upon the request of the debtor, the retention and sale of the pledged goods may be delayed for a period not exceeding one year from the date of the decision according to following conditions:

    1. The receivable provided with the pledge has to be existing before the concordat request.
    2. The receivable provided with the pledge shall not have unpaid interest until the date of the concordat request.
    3. The debtor must have proved that the pledged asset is necessary for the operation and in case of converting the pledged asset to money his economic situation would be in danger. In case of delay of the retention of the pledged property and the convert into the money, time to ask for a sale will be stopped.

Upon the request of the debtor, retail of the matter of financial leasing goods may be delayed for not more than one year from the date of the decision according to the following conditions:

    1. The debtor has to undertake the fulfillment of the lease agreement in accordance with the seventh paragraph of article 294.
    2. The rent arising from the financial lease agreement has to be existing before the concordat request.
    3. Unpaid rent should not exceed the three monthst amount.
    4. Because of this delay, the loss that may arise from the value loss of the financial leasing asset should be secured.
    5. The debtor should have approximately proved that the financial lease issued asset is necessary for the operation and that his economic existence would be jeopardized if the has been retailed. The creditors listed under the first and third paragraphs are invited to submit their written opinion regarding the confirmation of the concordat before the hearing; these creditors are also invited to the hearing. Delayment will be void if the debtor transfers the pledged or leased the property with the his/her consent, or bankrupt or die. The court confirmed the concordat shall remove the delayment decision upon the request of the creditor concerned by inviting the debtor, if it is able provide that the existence of one of the following circumstancesapproximately.
  1. If the debtor has obtained the delay by giving false information.
  2. If the wealth and income of the debtor has increased and the debtor will be able to pay the debt without putting his economic asset in jeopardy.
  3. If the convert of the pledged assets to Money or the retail of the leased property does not bring the economic existence of the debtor in jeopardy.
  • Unapproved concordat and the debtor’s bankruptcy:

If the concordatatum is not approved, the court decides to reject the concordat request and this decision is declared and notified to the concerned authorities. In case the debtor is from persons subject to bankruptcy and if one of the reasons for direct bankruptcy exists, the court decides itself to bankruptcy of debtor. Debtor or creditor offered concordat can appeal this decision for ten days from notification of decision and objecting creditors can appeal this decision for ten days from declaration of decision. An appeal may be filed within ten days against the decision of the regional courts of justice. Investigations of appeals are made according to the provisions of the Code of Civil Procedure.


The suspension of bankruptcy with the new regulation. In this case; debtors are benefiting from concordat as the easiest possibility to collect the receivables. Debtors’ benefit is a chance to continue their commercial activities and creditors’ benefit is a chance to collect their receivables.

The company which is in the state of being protected against the enforcement within the the suspension of bankruptcy will be able to conclude a concordat in this way or make necessary preparations for the reconstruction of the debts through reconciliation or forensic concordance.

Main purpose of the suspension of bankruptcy is ensuring the protection of company’s active assets. For this reason, the court has the authority to “take all necessary measures to protect the property of the company or cooperative” (Enforcement and Bankruptcy Law Article 179/1 first line). For providing the protection of company’s asset by suspension of bankruptcy;

• Improvement,

• Concordat,

• Reconstructing debt through compromise,

• Limiting operating expenses,

• Increase capital,

These are ways to apply.

Suspension of bankruptcy and concordat are institutions which are applicable for saving the capital company, besides that suspension of bankruptcy is applicable only for capital companies made notification as go into debt in accordance with article 324 of the Turkish Commercial Code “(According to legislative intention of article 376 of Turkish Commercial Code, “go into debt” means, creditors can not collect their receivables not only  evaluated as company’s active assets -as in annual balance sheet- book (acquisition), even for the real (potential sale value) valution.)”, ” However, such a condition is not sought in order to be able to apply concordat. Giving a temporary respite requires that the bankruptcy deadline expire; suspension of bankruptcy does not exist if temporary respite is existing.

Suspension of bankruptcy might not end with concordat (with reconstruction by conciliation). The company’s situation can improve by suspension of bankruptcy without concordat (without reconstruction by conciliation).

When evaluating in terms of procedure; suspension of bankruptcy, the needs existence of a balance sheet and a improvement project.  Concordat requires only the existence of a duly concordat project.

Concordat is an opportunity open to everyone, like: the capital companies, real person commercial businesses, real person.

However, suspension of bankruptcy is only a way for capital companies and cooperatives to apply. Nevertheless, according to the Supreme Court of Appeal and some doctrines; banks can not apply for a suspension of bankruptcy notwithstanding the banksa re joint stock company.

Both the concordat and suspension of bankruptcy may allow for the correction of a debtor’s financial situation. However; suspension of bankruptcy, is available for only the debtor whose passive assets are more than active assets, and debtor can apply to this way only when he/she deep in debt, concordat is a way applicable by debtors who are incapable to pay their debts.