Newsletter-21

377 Concordat as an Alternative to Suspension of Bankruptcy* Att. Fatih Isik Introduction As per the state of emergency declared in the Republic of Turkey on July 20th, 2016, and under Article 4 of Decree Law numbered 669 and dated 31.07.2016, corporations are prohibited from requesting, and the courts are prohibited to rule upon, suspension of bankruptcy. Through this prohibition, yet another opportunity, namely, the concor- dat, has again come into effect. The meaning of the word ‘concordat’, is a restructuring option for debtors in a poor financial situation, but one that has been rarely applied due to the advantages of suspension of bankruptcy. A concordat is regulated under Articles 285-309 of the Enforce- ment and Bankruptcy Code, and aims to protect both the debtors in poor financial standing, as well as their creditors. In the event that 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 reconstruc- tion agreement between the debtor and his/her creditors. Even if some creditors do not take a part or agree to the con- cordat, it will be binding upon them. Therefore, in order 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. * Article of September 2016 LAW OF CIVIL PROCEDURE AND ENFORCEMENT AND BANKRUPTCY