1) What Concordat Is (and Why Foreign Creditors Should Care)
Concordat is designed to prevent a viable business from collapsing into bankruptcy by giving it temporary court protection to negotiate a restructuring with creditors.
From a foreign creditor’s perspective, concordat changes the playing field quickly:
- enforcement pressure may be limited during the moratorium,
- payments may be delayed or rescheduled under a court-approved plan,
- unsecured creditors often face haircuts or long maturities,
- secured creditors must protect priority + collateral value while the business keeps operating.
2) The Timeline: Temporary Moratorium vs Definitive Moratorium
A typical concordat process has two key protection phases:
Temporary moratorium (geçici mühlet)
If the court finds the file credible, it may grant a temporary moratorium and appoint a concordat commissioner to supervise the debtor and assess feasibility. In practice, the temporary moratorium is initially 3 months, extendable (commonly referenced) by up to 2 months.
Definitive moratorium (kesin mühlet)
If the process appears viable after the initial review, the court may move to a definitive moratorium stage (with continued supervision and creditor engagement). Commentary pieces describing the process emphasize commissioner oversight, creditor interactions, and that the moratorium can be terminated if feasibility fails or the debtor acts against creditor interests.
Why this matters: foreign creditors should treat the temporary moratorium as the “first 30 days” of a crisis. That is when you gather intelligence, secure your position, and prepare your claim file.
3) Who Runs the Process? Court, Commissioner, and Creditor Bodies
Concordat commissioner
The commissioner is appointed at the temporary moratorium stage to supervise and evaluate whether the plan is feasible and whether creditor interests are being protected.
Creditor involvement (meetings / voting)
The process includes creditor engagement mechanisms such as meetings and voting mechanics (as discussed in practice overviews).
For foreign creditors, this is where leverage comes from: vote math + documentation + coalition building with other creditors.
4) Step-by-Step: What a Foreign Creditor Should Do
Step 1 — Immediately verify whether you are secured (and how strong that security is)
Before you argue about “fairness,” confirm whether you are:
- secured (pledge/mortgage/other security), partly secured, or unsecured,
- properly perfected/registered,
- actually covered by collateral that is owned by the debtor (watch leasing/ROT/third-party goods).
A secured position is only valuable if it survives challenge and if the collateral still exists when enforcement becomes possible.
Step 2 — Build a “concordat-proof” claim file
Foreign creditors often lose time (and negotiating power) due to document formalities. A good file typically includes:
- contract(s) and annexes,
- invoices / statements of account,
- delivery / acceptance evidence where relevant,
- default notices,
- interest calculation sheet,
- security documents (if any),
- translations (Turkish) and certification/apostille strategy where needed.
Recent commentary specifically highlights the procedural complexity around foreign documents in concordat and the need to handle those formalities carefully.
Step 3 — File and register your claim correctly and on time
In concordat practice, the operational reality is simple: if your claim is not properly presented and supported, you risk being treated as “disputed,” delayed, or strategically discounted in negotiations. Many practitioner guides emphasize proper claim preparation, calculations, and sworn translations for foreign creditors.
Step 4 — Track court decisions and commissioner communications
Foreign creditors should monitor:
- moratorium decisions and extensions,
- commissioner reports and requests,
- creditor meeting dates,
- plan drafts and revisions,
- asset sale approvals (if any).
Missing one procedural milestone can cost you leverage.
5) Secured Creditors: Special Priorities and Special Risks
If you are a secured creditor (mortgage, pledge, etc.), your key objectives during concordat are:
A) Stop collateral leakage
If collateral is dynamic (inventory/receivables), value can “leak” while the debtor continues operating. You want:
- tighter reporting,
- restrictions on extraordinary disposals,
- transparency on asset sales and proceeds use,
- updated collateral schedules.
B) Defend priority and scope
Priority disputes are common in distress. Make sure:
- your security is properly registered/perfected,
- collateral definitions are precise,
- you can prove ownership and location/identity of the asset.
C) Use security as negotiation leverage
Even when liquidation is not optimal, secured status often improves your plan terms. In practice, creditor dynamics and plan voting can amplify this leverage.
6) Unsecured Creditors: How to Avoid Being “Squeezed”
Unsecured creditors face the most restructuring pressure. Practical protection tools include:
- early coalition building with other creditors,
- pushing for realistic cashflow assumptions (not “hope projections”),
- insisting on transparency for related-party transactions,
- requesting safeguards against preferential treatment of insiders,
- negotiating side protections where possible (e.g., tighter payment schedule, reporting, or security enhancements).
7) Common Foreign-Creditor Pitfalls (and How to Avoid Them)
Pitfall 1: Treating concordat as “just wait and see”
Concordat moves quickly in the early phase. The creditor that acts early shapes the narrative.
Pitfall 2: Weak evidence of the debt (especially for services/projects)
If you have milestone/acceptance-based claims, missing acceptance documentation is deadly.
Pitfall 3: Not handling foreign document formalities
Sworn Turkish translations and certification planning should be done upfront; procedural treatment of foreign documents is a recurring theme in practice.
Pitfall 4: Assuming security exists because “assets are on site”
Leasing and title issues can remove key assets from the debtor’s estate.
8) Practical Strategy: A Foreign Creditor’s “90-Day Playbook”
Days 1–10
- confirm moratorium status and deadlines,
- classify your claim (secured/unsecured),
- start translations and certification process,
- request/collect evidence needed to prove the claim.
Days 10–30
- submit a clean claim package,
- map debtor assets and counterparties,
- engage with the commissioner process and creditor network.
Days 30–90
- evaluate plan drafts,
- model recovery under best/base/worst cases,
- negotiate terms and protections,
- prepare parallel enforcement options if concordat fails.
Conclusion
Concordat in Turkey is a structured, court-supervised restructuring mechanism regulated under the Enforcement and Bankruptcy Law (commonly cited as Articles 285–309).
For foreign creditors, outcomes depend far less on abstract rights and far more on process discipline: building a litigation-ready claim file, handling foreign document formalities, preserving collateral value, and using creditor-meeting dynamics to negotiate plan terms. Practical overviews of the regime emphasize moratorium phases, commissioner supervision, and creditor participation as the operating core of the system.
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