What is Concordat?
Concordat is a legal institution that aims to enable debtors with deteriorated financial conditions to continue their activities and improve their financial situation while protecting the rights of creditors. This process, regulated under the Enforcement and Bankruptcy Law, is considered as an alternative to bankruptcy.
Concordat Application Conditions
To request concordat, the debtor must be in one of the following situations:
- Inability to pay matured debts
- Foreseeing inability to pay future matured debts
- Deteriorated financial condition
- Debts exceeding assets
Concordat Process
The concordat process consists of several stages:
1. Application Stage
- Debtor's application to the court
- Submission of financial status report
- Preparation of concordat project
- Granting of provisional respite decision
2. Definitive Respite Stage
- Appointment of concordat commissioner
- Holding creditors' meeting
- Negotiation on the project
- Granting of definitive respite decision
Content of Concordat Project
A successful concordat project should include the following elements:
- Restructuring of debts
- Details of payment plan
- Interest arrangements
- Provision of collateral
- Business revitalization
- Revenue enhancing measures
Concordat Commissioner Duties
The concordat commissioner has a critical role in successful process management:
- Supervising debtor's activities
- Mediation between creditors and debtor
- Evaluating project feasibility
- Reporting to the court
- Ensuring legal compliance of the process
Benefits of Concordat
A successful concordat process provides the following benefits:
- Avoiding bankruptcy
- Continuation of business operations
- Employment protection
- Higher collection for creditors
- Preservation of economic value
- Market confidence restoration
Considerations in Concordat Process
Key considerations for successful concordat process:
- Preparing a realistic project
- Convincing creditors
- Ensuring cash flow
- Operational improvements
- Transparency and accountability
Our Legal Consultancy Services
As Cebeci Law Firm, our services in concordat process:
- Concordat application consultancy
- Concordat project preparation
- Legal representation throughout the process
- Creditors' meeting management
- Coordination with concordat commissioner
- Defense in objection processes
