ARRANGEMENT OF BANKRUPTCY AS DEBT CONFIGURATION INSTITUTION IN 10 STEPS
The debtor may be from bankrupt or non-bankrupt persons. Creditors of the bankrupt debtor may also offer concordat.
- Concordat Causes
The concordat is due to the fact that the borrower; is unable to pay overdue debts, is in danger of not paying it due, and that capital companies and cooperatives are submerged in debt.
- Concordat Offer
The Borrower filed a petition to the commercial court of first instance and requests an arrangement of bankruptcy with with the documents specified in article 286 of enforcement and bankruptcy law. The competent court is the settlement of the debtor for the common debtor, the debtor’s treatment center court for the debtor subject to bankruptcy.
The person submitting the concordat should submit the concordat project with the offer. If it is a creditor, it is requested to submit other documents along with the project within the definite time the court will give to the debtor. If the debtor does not present, the offer is rejected, since the concordat has no chance of success.
- Provisional Decision Making
If the documents specified in article 286 of enforcement and bankruptcy law are given completely, a temporary period of 3 months is given and this period can be extended for a maximum of 2 months. The temporary deadline decision is a measure decision in nature. It is aimed to protect the debtor’s assets with the rights of the creditor until the final deadline. During this period, a temporary concordat commissioner is appointed and other necessary protection measures are taken.
In case the debtor and the concordat offer is made by the creditor, the court may decide to remove the deadline by listening to the creditor (and if necessary, other creditors) in the event that the reason for the concordat disappears during the temporary deadline or if the concordat purpose is realized.
- Final Decision Making
The court shall set a hearing within the temporary deadline for the final deadline. The temporary concordat commissioner submits his report to the court in writing before the hearing.
At the hearing, the court listens to the debtor and the creditor offering the concordat and the temporary commissioner when necessary. In addition, if there are creditors who object to the temporary deadline decision, a decision is made about these objections.
If it is understood that the concordat could be successful within the temporary deadline period, a definite deadline is given for 1 year. This period can be extended up to 6 months. A concordat commissioner is appointed with the final deadline decision.
- Creating Creditors Board
It is not an obligatory body, but an optional body created based on the need.
With the final deadline decision, the court may decide to establish a creditors board if it deems necessary.
The creditors’ board is formed at a time that will be deemed appropriate within the definite deadline, with the opinion of the commissioner, and it is formed in a single number, whithout exceeding seven people. The members of the Board are determined especially by considering different creditor groups and pledged creditors. In this context, care is taken to ensure equitable representation of different creditor groups.
- Inviting Creditors to Meeting and Negotiating with Creditors
The concordat project is negotiated.
The concordat commissioner, whose concordat file has been deposited with him, oversees the proceedings of the debtor, unless he has been assigned by the court for other work. However, there are some duties assigned to the concordat commissioner by the law and regulation.
Creditors meet at the time and place specified in the announcement under the chairmanship of the commissioner to negotiate the concordat project of the borrower. At the meeting, the Commissioner first presents a report to the creditors about the condition of the debtor. Further, the borrower has to be present at the meeting to make necessary explanations and answer the questions asked to him.
In the common concordat, the project can also be negotiated with pledged creditors, provided that the debtor has been involved in the preliminary project. There is no negotiation with pledged creditors without such a proposal by the borrower. However, it is not an approval condition whether the project is accepted by pledged creditors.
- Submitting the Concordat Project to the Court for Certification
The last task of the concordat commissioner is to present the concordat file to the court with the report he will prepare within seven days, together with the negotiated and voted concordat project and his reasoned report.
The concordat project is presented to the court along with the reasoned report of the concordat commissioner.
- Examination and Approval of Concordat
The date of the hearing is announced after the concordat file and the report of the concordat commissioner are delivered to the court. This announcement necessitates that those who want to appeal must report their objection within three days and can attend the hearing if they wish.
The certified concordat is subject to the concordat but also bonds the creditors who cast negative votes. This binding begins, as a rule, with the approval decision.
Legal action may be taken against the approval or rejection decision.
- Termination of Concordat
Any creditor who has not been paid within the framework of the concordat provisions can apply for the termination of the concordat only for him, with the condition of preserving the rights granted to him by the approved concordat, by applying to the court that certifies the concordat with the approval of the concordat approved. If the court decides to terminate the concordat in terms of this creditor, this creditor is free from being bound by the concordat provisions. He can follow the enforcement proceedings against the borrower.