RECENT AMENDMENTS ON THE ENFORCEMENT AND BANKRUPTCY CODE AND SOME OTHER CODES

The Code numbered 7101 amending Enforcement and Bankruptcy Code and Some Other Codes (“Code”) (in Turkish “İcra ve İflas Kanunu ve Bazı Kanunlarda Değişiklik Yapılması Hakkında Kanun”) was published in the Official Gazette on 14 March 2018.

Among the several changes brought with the Code, you can find here-below, the most remarkable ones:

• The postponement of bankruptcy (in Turkish “iflas erteleme”) in the Enforcement and Bankruptcy Code (“EBC”) numbered 2004 has been abolished as a result of the problems faced in practice due to the drastic increase in the number of postponement applications in recent years and the misuse of this mechanism although it should have been an exceptional way of suspending enforcement proceedings initiated by the creditors for the collection of receivables.
• Instead the postponement of bankruptcy, the debtor may make filing for concordat to pay the debts or to avoid from a possible bankruptcy.

• As per the sentence added to article 128 of EBC, the assets and the rights that constitute a commercial and economic integrity or that are expected to bring a higher money when sold as a whole shall be converted into money as an indivisable integrity.
• As per the amended article 208 of EBC, the three-month period that was granted to the bankruptcy office (in Turkish “iflas dairesi”) to decide on the type of liquidation to be applied has been shortened as 2 months.

• As per the sentence added to article 227/1 of EBC, the administration of bankruptcy (in Turksh “iflas idaresi”) is obliged to give information to the creditors accepted for bankrupt’s estate (in Turkish “iflas masası”) regarding the progress of the liquidation process together with the planning and the calendar of the following steps, if required by the creditors.
• According to amended article 285 of EBC, any creditor who is authorized to file bankruptcy proceeding is now authorized to ask for initiating concordat procedures against the debtor.

• According to amended article 289 of EBC, if it is concluded by the court that it is possible to achieve the purpose of concordat, one year of peremptory term (in Turkish “kesin süre”) shall be granted to the debtor. In the specific cases, this one year term may be extended up to six months upon the request of the trustee (in Turkish “komiser”) based on the trustee’s reasoned report.

• As per the amended article 291 of EBC, the granted peremptory term may be repelaed by the court, If the financial position of the debtor improves.
• As per the article 308/1 added to EBC, the judgement issued by the court regarding concordat can be appealed within 10 days before Provincial High Court of Appeal (in Turkish “Bölge İstinaf Mahkemesi”) and the judgment of the Provincial High Court of Appeal can be appealed within 10 days before the Supreme Court of Appeal.
• As per the amendment made to article 4 of Turkish Commercial Code, the trial procedure to be applied to commercial disputes not exceeding TRY 100,000 (one hundred thousand Turkish Lira) have been changed and simplified (“Basit Yargılama Usulü”).
• According to the amendment on article 7/a that will come into force on 1 January 2019, it is imperative to make notification to the specified real and legal persons including notaries, lawyers, mediators, experts, private law legal entities etc. electronically through their electronic mail addresses. E-notification shall be accepted as to have been made at the end of the fifth day following the date that it comes to the electronic mail address of the relevant real or legal person. Under the scope of this article, the electronic notification addresses will be generated by PTT (General Directorate of Post and Telegraph Organization).

Our Law Firm remains at your disposal for any further clarifications you may require.