Legal Work That Can Be Carried Out on This Subject
Confirmation of the Composition
The court examines together the statutory majority, whether the amount offered exceeds the likely recovery in bankruptcy, proportion to the resources, privileged claims, fees and expenses, and the other conditions for confirmation.
The confirmation decision must clearly show the scope of the plan, the payment schedule, the necessary supervision and the other provisions. Obtaining the votes in favor does not in itself produce confirmation; the court must independently examine the conditions.
Implementation and Supervision After Confirmation
Responsibilities are set for the payment schedule, reporting, audit, asset sales, new financing, changes in security and deviations from the plan. Where the court has appointed a trustee, coordination is established with the trustee’s duties and reporting arrangements.
After the plan, new debts, current taxes and wages, and working capital are monitored separately. The delay of a payment is assessed immediately with regard to the plan as a whole and the rights of creditors.
Revocation of the Composition and the Risk of Bankruptcy
If the terms of the composition are not performed in respect of a creditor, partial revocation may arise; if it is impaired in bad faith, full revocation and, if the conditions are met, the consequences of bankruptcy may arise.
The scenarios of rejection of the filing, lifting of the final moratorium or default after confirmation are planned in advance. The liability of managers, the continuation of enforcement, security, employees, contracts and the options for orderly liquidation are assessed at the same time.
The Review Does Not End With the Vote
A majority is not in itself sufficient for confirmation. The conditions of Enforcement and Bankruptcy Law (İİK) Art. 305, the source of payment, the bankruptcy comparison, security and expenses are examined together. Which claims the confirmed plan binds, the secured part, privileged and public claims, and debts that arose with the commissioner’s permission are assessed separately.
If payment is not made
The payment date, the payment actually made and the proof of the breach are compared. Partial revocation under İİK Art. 308/e is different from full revocation based on bad faith under Art. 308/f. Not every refusal or every delay is automatically tied to a bankruptcy result.
Supplementary Questions
If a creditor rejects the plan, is it still bound?
A confirmed plan may also bind a creditor who voted against it or did not vote, with regard to claims within the scope of the law. The exceptions for secured, privileged and public claims apply separately.
Is the composition process confidential?
No. Public visibility may arise because of the court decision, the announcement and the creditor process. Trade secrets and personal data must be protected from unnecessary spread; however, information that the law requires to be submitted to the court, the commissioner, the auditor and the creditors cannot be withheld.