A concordat in Turkey (konkordato) is a court-supervised restructuring procedure that allows a debtor who cannot pay debts as they fall due (or is at risk of default) to propose a repayment/restructuring plan to creditors and continue operating under legal protection—rather than going straight into bankruptcy. The concordat regime is regulated in the Turkish Enforcement and Bankruptcy Law (İcra ve İflas Kanunu), Articles 285–309.
This SEO-friendly guide explains what concordat is, who can apply, the temporary and definitive moratorium stages, what the concordat commissioner does, how creditor voting and court approval work at a high level, and the main risks and best practices.
1) What Is Concordat (Konkordato) in Turkey?
Concordat is essentially a judicial restructuring agreement between the debtor and creditors. The debtor presents a plan (often installment payments, maturity extensions, partial forgiveness, or a combination) and, if the required creditor majorities are reached and the court approves (confirms) the plan, it becomes binding within its scope.
In modern Turkish practice, concordat is widely viewed as an alternative to “collapse scenarios,” aiming to preserve going-concern value while giving creditors a structured recovery path.
2) Who Can Apply for Concordat?
In general terms, concordat can be sought by debtors who:
- are unable to pay debts on time, or
- are at risk of being unable to pay (financial distress / liquidity crisis).
The application is typically filed with the commercial court (in practice, Commercial Court of First Instance) and must be supported by documents demonstrating the debtor’s financial position and the proposed concordat project/plan.
3) The Concordat Timeline: Temporary Moratorium vs Definitive Moratorium
Concordat is commonly discussed in two main court-protection phases:
A) Temporary Moratorium (Geçici Mühlet)
If the court finds the initial file credible enough to justify protection, it grants a temporary moratorium and appoints a concordat commissioner to supervise and review feasibility.
Duration (commonly applied):
- Temporary moratorium is generally 3 months, and it can be extended by up to 2 additional months (total up to 5 months).
B) Definitive Moratorium (Kesin Mühlet)
If the commissioner’s work and the court’s assessment indicate the plan has a realistic chance of success, the court may grant a definitive moratorium.
Duration (commonly applied):
- Definitive moratorium is generally 1 year, and it can be extended by up to 6 months (total up to 18 months).
4) What Does the Concordat Commissioner Do?
The concordat commissioner is appointed to supervise the process and evaluate whether the concordat project is feasible. In practice, the commissioner:
- reviews financials and cashflow assumptions,
- monitors certain actions during the moratorium,
- prepares reports for the court on feasibility and compliance.
Practical reality: A debtor’s transparency and the credibility of its cashflow plan often determine whether the case survives to definitive moratorium and approval.
5) Key Effects of the Moratorium (High-Level)
During the moratorium period, the debtor benefits from court protection designed to stabilize the situation while the restructuring is evaluated. The exact effects can vary by case posture and the court’s decisions, but the core idea is to reduce immediate enforcement pressure and support an orderly restructuring process under judicial oversight.
For creditors, the moratorium is a trade-off:
- they may face limitations on aggressive collection in the short term,
- but (ideally) they gain a structured recovery route that may outperform a value-destructive collapse scenario.
6) Creditor Voting and Court Approval (Conceptual Overview)
Concordat is not only a debtor’s request; it must be accepted through a structured process involving creditors and the court. While the precise voting thresholds and classifications can be technical and case-specific, the general principle is:
- creditors evaluate and vote on the proposal, and
- the court assesses legality and feasibility and then decides whether to approve/confirm the concordat.
Deal logic: Courts and creditors are more likely to support plans that are (1) financially realistic and (2) transparently documented.
7) Common Reasons Concordat Fails
Concordat applications frequently fail due to:
- unrealistic revenue assumptions (forecasting sales instead of forecasting collections),
- lack of credible financing to support operations during the moratorium,
- incomplete or inconsistent documentation,
- hidden liabilities surfacing (tax/SGK disputes, enforcement pileups),
- poor stakeholder management (key suppliers/customers leaving mid-process),
- “time-buying” filings without a viable restructuring plan.
8) Best Practices for Debtors: What Increases Success Chances?
If a company is considering concordat, these steps commonly improve outcomes:
- Build a conservative cashflow model
Focus on collections and hard commitments, not best-case projections. - Segment creditors and propose realistic treatment
A plan that ignores operational reality (suppliers, essential creditors) often collapses. - Prepare an “audit-ready” documentation pack
Clean ledgers, contract files, and explainable numbers matter as much as legal filings. - Stabilize operations early
Cost control, inventory discipline, and collections strategy are often decisive. - Treat transparency as a strategy
Commissioner trust and court confidence are practical assets in a concordat file.
9) Best Practices for Creditors: How to Evaluate a Concordat Proposal
If you’re a creditor facing a debtor’s concordat process, focus on:
- source of payments: operating cashflow vs new financing vs asset sales,
- assumption realism: do the numbers match sector reality?
- governance controls: monitoring/reporting commitments during the period,
- priority and security map: collateral and enforceability landscape,
- alternative scenario: is recovery better than bankruptcy/liquidation?
10) Quick Checklist: Documents and Data That Matter Most
Whether debtor or creditor, these items drive clarity:
- updated balance sheet and income statement,
- receivables aging + realistic collection schedule,
- creditor list with amounts and security status,
- cashflow forecast with assumptions and evidence,
- list of lawsuits/enforcement files and potential exposures,
- list of essential contracts and any change-of-control/termination risks.
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