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COMPOSITION WITH CREDITORS · DEBT RESTRUCTURING

Composition and Debt Restructuring

From payment difficulty to a workable plan. Legal support for filing for composition with creditors, restructuring of bank and commercial debts, moratorium management and creditor rights.

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DEBTOR COMPANY · CREDITOR · MANAGEMENT

Our Composition and Restructuring Services

Composition with creditors (konkordato) is a route that allows a debtor who is experiencing payment difficulty, or who faces that risk, to arrange its debts under court supervision. The right solution is not the same for every company. By reviewing the company’s payment capacity, creditor structure and security, we compare an out-of-court agreement with the conditions of a composition.

  • Early intervention and choosing a route

    Cash shortfall, over-indebtedness, management responsibility and assessing the alternatives.

    Compare the routes

  • Bank and commercial debts

    Bank negotiations, multilateral protocol, new financing and security arrangement.

    Restructuring options

  • Composition filing

    Preliminary composition plan, application documents, coordination of the independent audit and expense plan.

    Review the filing preparation

  • Moratorium and company management

    Enforcement proceedings, pledges, contracts, transaction permits and information flow with the composition commissioner.

    Learn the effects of the moratorium

  • Creditor rights

    Claim notification, objection, pledge value, meeting, voting and disputed claims.

    Creditor roadmap

  • Confirmation and implementation

    Confirmation conditions, payment schedule, supervision of the plan, revocation and bankruptcy risk.

    Steps after confirmation

Three Key Distinctions Before You Decide

CHOOSING A ROUTE

Cash shortfall and over-indebtedness

Short-term payment difficulty is not the same as loss of capital and over-indebtedness under Article 376 of the Turkish Commercial Code (TTK). The duties of management are assessed separately.

PROTECTION

Filing and the moratorium order

Preparation or filing alone does not stop all enforcement proceedings. The scope of protection depends on the court’s decision, the nature of the claim and the statutory exceptions.

SECURITY

Separate the company from the surety

The protection granted to the company does not automatically extend to a surety, an aval guarantor (avalist) or a co-debtor. The position of pledge-secured claims, employee claims and public receivables is reviewed separately.

Our Approach During the Restructuring Process

  1. Verifying the data

    Debts, maturities, enforcement proceedings, security and cash flow are brought together in one file; urgent actions are identified.

  2. Route and plan

    Negotiation, financial restructuring and composition are compared in terms of resources, cost and feasibility.

  3. Filing and representation

    Within the agreed scope, the documents, negotiations, and court and commissioner proceedings are handled.

  4. Implementation and monitoring

    Payments, new debts and deviations from the plan are monitored; if circumstances change, an alternative route is assessed.

What do we clarify in the first consultation?

We determine your capacity as a party, the urgent deadlines, the missing documents, the appropriate scope of review and the next step. The financial model, the independent audit and the valuation are the work of the relevant authorized experts. The attorney’s fee and the audit, commissioner, announcement and litigation costs are explained separately. A conflict-of-interest check is carried out before a matter is accepted.

Preparing for the First Consultation: A Document List Depending on Which Party You Are

For the debtor company

  • Current financial statements, cash flow and creditor list.
  • Loan, security, suretyship and critical commercial contracts.
  • Enforcement proceedings, tax and Social Security Institution (SGK) debts, status of wage payments.
  • Management decisions and earlier restructuring proposals.

For the creditor

  • The basis of the claim, account statement and payment records.
  • Pledge, suretyship, aval (guarantee given on a negotiable instrument) and guarantee documents.
  • Announcements, commissioner notices and any court decisions.

Questions About Composition and Debt Restructuring

Does a composition wipe out all debts?

No. The payment ratio and maturity depend on the plan and the conditions of confirmation. Claims outside its scope, pledges and the liability of third parties are assessed separately.

How long do the provisional and final moratoria last?

The provisional moratorium is three months; if the conditions are met, it can be extended by up to two months. The final moratorium is one year; in special circumstances that present difficulty, it can be extended by up to six months under the statutory conditions. These periods are not granted automatically and are not a firm end date for the entire proceedings.

Can tax and SGK debts be reduced through the plan?

The enforcement status of public receivables under Law No. 6183 on the Procedure for Collection of Public Receivables during the moratorium differs from the way a confirmed plan affects them. Public debts cannot be regarded as subject to the same regime of reduction and binding effect as commercial debts.

If I miss notifying my claim, is the debt wiped out?

It is not wiped out automatically. However, for a claim not recorded in the balance sheet, a loss of participation in the negotiation may result. Rights relating to notification, litigation and the share to be set aside should be reviewed without delay.

Can the company keep operating while in composition?

As a rule, it may continue its operations under the supervision of the commissioner. The court’s restrictions, statutory prohibitions on transactions and the necessary permits are taken into account.

Does reaching an agreement with the bank stop the other creditors?

No. As a rule, an out-of-court contract binds its parties. A separate plan is needed for the enforcement and security rights of the other creditors.

If the composition is rejected, does bankruptcy necessarily follow?

Not every rejection leads to the same result. Whether the debtor is subject to bankruptcy, the reason for the rejection and the statutory conditions for bankruptcy are assessed.

Are assets outside Türkiye also protected?

It cannot be assumed that a decision of a Turkish court provides automatic protection in a foreign country. A review by an attorney authorized in that country and the necessary local procedures are planned separately.

Legal Coordination Based in Antalya, Across Türkiye

Güneş & Güneş Law Firm, founded in Kemer on March 18, 1999, evaluates files in all 81 provinces of Türkiye according to the company’s headquarters, the court with subject-matter and territorial jurisdiction, the distribution of creditors and the requirements of representation. Our physical headquarters has been in Antalya since 2007.

In matters involving foreign financing or assets, local representation is carried out by an attorney authorized in the relevant country; the selection, document flow, follow-up, communication and fee scope are decided separately.

Languages of communication: Turkish, English, German and Russian.

Legal Basis

Depending on the nature of the dispute, the provisions on commerce, obligations and procedure and the relevant special regulations are assessed together.

LEGAL ASSESSMENT SPECIFIC TO YOUR FILE

Let us assess your restructuring options and your rights together.

In your first communication, state your capacity as a party, your request and any upcoming date.

Request a Consultation

This content is general information. Information and documents you share are kept confidential and used for legal assessment and within the agreed scope of service. An inquiry alone does not create an attorney–client relationship and does not stop time limits. The legal conditions of the specific matter are reviewed separately.