It is said that some companies may face the risk of bankruptcy, while companies in the food and beverage sector, who have experienced a serious crisis as a result of the economic measures taken from the current epidemic, and are looking for a way out. So what should companies do to avoid bankruptcy? Or what steps to take?
We can mention that there are cases of precautions regulated by laws regarding these issues. We examined the issue of Concordat, which is the most important of these measures and seems to be the last way out in the business sector.
We have included in our news what we need to know and pay attention to about Concordat, which can also be called Bankruptcy agreement.
Explaining all the details that need to be known about Concordat, an institution that exists in order to prevent the bankruptcy and to continue its commercial life by organizing a recovery project in order to prevent the companies from ending their activities due to the risk of bankruptcy that arises due to the economic bottleneck, Prof Law Firm Founding Lawyer Atty. Emre Avşar stated that there were demands during the epidemic period and that the processes in this regard continue.
Hunting. Emre Avşar continued his explanations as follows: Companies that have lost their equities due to their existing debts or are in danger of losing their equity can file a lawsuit with a concordat demand at the Commercial Court of First Instance within the framework of a recovery project. Concordat is an institution regulated between the articles of HRD 285-309. Accordingly, the plaintiff applies to the court and requests that they be given a temporary concordat period of 3 months in the first stage and that the concordat measures be taken in accordance with the relevant law and a temporary Concordat Commissioner is appointed.
What are the Measures Covering the Consortium Deadline?
Among the measures covering the concordat deadline, non-execution proceedings against the company without judgment, cessation of the already initiated proceedings, follow-up in terms of pledged or privileged debts or if the follow-up is decided to continue, the transactions of converting the pledged debt or collateral amounts into cash are stopped. At the end of this period, it is decided whether the company can obtain a 1-year Concordat Final Term with the Report of the Concordat Commissioner and the court decision.
What Are The Documents That Are Considered As A Case Requirement To Request Concordat?
According to the conditions of filing the relevant case; The pre-concordat preliminary project, a reasonable assurance report prepared by the CMB Independent Auditor, debts and receivables and terms, company inventory lists, tax records, SGK records, company balance sheets, company book approvals and the decision of the general assembly or board of directors to go to the concordat should be clearly included.
The Concordat Pre-Project is a detailed recovery project that explains how to get out of the current bottleneck. According to this project, it includes detailed explanations on how to pay the receivables to the creditors, whether the debts will be paid immediately with a spread of maturities or with a reduction of one degree by deduction and Concordat proceeds according to this project.
The appointed Concordat Commissioner / Commissioner Committee acts as the manager of the company by working to ensure that the company's assets are not reduced and the project can be implemented. At the end of the 3-month temporary deadline and the 1-year definite deadline, if there is a definite opinion that the project can be implemented, the concordat will be approved and the debts of the company will be paid either in terms of maturities or in one time according to the approved decision.
The approval of the concordat is also stipulated. The most important of these is the condition of the Concordat Commissioner or the Commissioner's delegation to determine that the company can reach the profitability margin it predicts by realizing its current future projects and to agree with the Concordat creditors.
In addition to the receivables notified by the plaintiff within a definite deadline of 1 year, the creditors are also invited to declare their receivables within 1 month after the notification made in the Press Advertisement Institution. The creditors board can be established at the request of the concordat commissioner or the creditors. Consequently, the Concordat will be approved if there is no further obstacle as a result of more than half of the recorded receivable and ultimately two-thirds of all creditors accepting the current Concordat offer.
If the concordat is approved, the existing debts are paid as shown in the Preliminary Concordat project. All creditors must comply with the approved Concordat, whether they accept it or not. However, if the conditions specified in the preliminary project are delayed by the debtor, the creditors will be expected to use their legal rights.
What will happen if the concordat is not approved?
As we have stated above, if the Concordat is not approved due to the lack of acceptance conditions, the case will be rejected and all measures imposed with a definite deadline will be lifted. As of the date of rejection, if the plaintiff is in debt as capital, it will be decided to open bankruptcy. Since the case regarding bankruptcy concerns public law, the judge of the commercial court has to decide ex officio if he sees this situation.
In that case, the management of the debtor's assets will be in the bankruptcy office and the bankruptcy administration to be established.
What companies should pay attention to when applying for concordat?
As we mentioned above, concordat is an opportunity for companies that are in a bottleneck in paying their debts, and sometimes it can affect companies negatively. The balance between benefits and benefits between applying to concordat or not should be well analyzed and decided by companies. There are main reasons for this.
First of all, the high level of mortar is one of the biggest factors. Due to the high expense advance determined as the condition of the case and the high monthly salaries of the concordat commissioners, the expenses reach 200.000 - 300.000 TL.
Well, is there no way to save on these fees?
These expenses requested by the court to be paid are mandatory as they are a condition of the lawsuit, and their failure to pay within the given time is the reason for rejection of the case.
However, since the Concordat Commissioners are usually appointed as a delegation of 2 or 3 people, the average monthly wage of 10.000 TL for each commissioner sometimes forces companies. In cases such as the financial structure of the company, having managerial convenience and not being a high-cost company, the plaintiff companies may request a single commissioner management. In general, the Commercial Court may decide to appoint a single commissioner when it deems the justification of this request. In this case, the lawsuit costs can be reduced to some extent.
Another issue to be considered is the status of preferential receivables. Ordinary receivables in the concordat request can be paid without interest from the date on which the concordat temporary respite decision is made, if the concordat is approved. However, mortgaged etc. with the status of preferential receivables. The situation is different in terms of receivables. As we mentioned above, the deadline decision will not stop the pursuit of the privileged receivables, and the interest will continue to run from the moment of follow-up until the Concordat is confirmed. In this case, it is always possible to reach an agreement with the privileged creditors on interest within the deadline.
Can Only Companies Declare Concordat?
Real and legal persons can also apply for concordat litigation. Even if they are not subject to bankruptcy as a result of the changes made in the law, real persons can also apply for concordat. This route is generally preferred by company partners who vouch for the company's debts. The real person who is a guarantor for the debt of the company with his / her own assets can apply with the company in order to take advantage of the concordat measures in order not to cause economic damage, since he is liable for the debt balance that cannot be collected from the company applying to the concordat due to financial impossibility, as well as his own surety.
However, these persons will not be required to prepare a CMB Reasonable Assurance Report and will not result in bankruptcy in any way, unless they are real persons who do not have the title of merchant.
Is It Possible To Give Up The Concordat Request?
Regardless, since the concordat approval request is a type of case that is heard in the Commercial Court of First Instance and the claimant is considered as the plaintiff, there is always the right to waive the case. Since the waiver can be made by the plaintiff with a unilateral declaration of will, it has not been subject to a permit, acceptance or approval. Withdrawal of the case due to waiver was linked to the results of the refusal. In this way, all the deadline measures are lifted and, as mentioned above, if the current balance sheet of the plaintiff is not in debt as of the date of withdrawal, it is decided to dismiss the case, if it is in debt, it is decided to open bankruptcy.
Ultimately, the concordat is a convenient way for companies that can pay the debts that have been postponed by leaving the bottleneck with production and service, as long as the payment is made to the creditors according to the current project, if the period of concordat proceeds completely and smoothly.
Since the concordat process lasts for about 2 years and is a difficult process for the company managed by a Commissioner Committee within this period, it can be a salvation project for companies that cannot pay their debts in the current economic conditions, or if they are not well analyzed and equipped accordingly, it can also be a demolition project. .
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